By investing in an index fund, you will be buying a basket of stocks through a single investment. Most UK index funds come in the form of ETF, which will track a particular marketplace. For example, you might invest in an index that tracks the best-performing companies on the AIM.
Similarly, you might choose to invest in a FTSE 100 index fund, meaning you are buying shares in the 100 largest firms listed on the London Stock Exchange. Index funds won’t restrict you to UK stocks, either. On the contrary, there are heaps of international index funds such as the Dow Jones and S&P 500.
With so many options on the table, this guide will discuss the best index funds in the UKin 2020. We cover a variety of funds across several UK and international marketplaces – subsequently ensuring that you have ample choice.
- 1 Top Index Funds UK
- 2 2020’s Best Index Tracker Funds Reviewed
- 3 How do Index Funds Work in the UK?
- 4 How do you Money From an Index Fund?
- 5 What are the Benefits of Investing in a UK Index Fund?
- 6 What are the Risks of Investing in Index Funds UK?
- 7 How to Choose the Best Index Funds for you
- 8 Best UK Brokers for Index Funds
- 9 How to Invest in Index Funds in the UK
- 10 Step 1: Open an Online Trading Account
- 11 Step 2: Deposit Funds
- 12 Conclusion
- 13 FAQs
Top Index Funds UK
Don’t have time to read our guide in full? Below you will find an overview of the best index funds of 2020.
- iShares FTSE 100 UCITS ETF – Best Index Fund to Track the FTSE 100 – Invest Now
- SPDR S&P 500 Index – Best Index to Track the S&P 500 – Invest Now
- Vanguard Total Stock Market Index Fund – Best Index for US Companies – Invest Now
- FTSE SmallCap Index – Best Index Tracking Fund for Small UK Companies
- iShares MSCI China ETF – Best Index to Invest in China
2020’s Best Index Tracker Funds Reviewed
With so many index funds available to UK investors, it can be challenging to separate the wheat from the chaff. In particular, you need to assess what your long-term investing goals are.
For example, are you looking to invest in an index fund that tracks major UK companies? Or, are you looking to target higher returns by choosing an index that tracks the AIM? Alternatively, you might be looking to take a more diversified approach by choosing an index fund that covers both UK and international firms.
Taking all of this into account, below we have narrowed our list of the best index funds down to just five. Whether you’re looking for low cost index funds or the best Vanguard index funds, we’ve got you covered.
1. iShares FTSE 100 UCITS ETF – Best Index Fund to Track the FTSE 100
If you’re looking for the easiest and most cost-effective way of investing in the FTSE 100, then you might want to consider the ETF provided by iShares. This index fund will allow you to buy shares in all 100 companies that represent the FTSE 100.
As and when the FTSE rebalances the 100 companies that constituent the index, iShares will follow suit. That is to say, if Marks & Spencer drops out of the index, iShares will sell their holdings in the firm. Then, the ETF provider will proceed to purchase shares in the new company that joins the index.
With this in mind, the Shares FTSE 100 UCITS ETF is 100% passive. When it comes to weighting its portfolio, iShares will look to replicate the FTSE 100 like-for-like. This ensures that your investment mirrors the performance of the London Stock Exchange in the closest manner possible.
In terms of account minimums and fees, this will ultimately depend on whether you go direct with the provider or use a third-party broker. For example, while iShares charges 0.07% per year on this ETF, FCA broker eToro allows you to invest commission-free.
Your capital is at risk.
2. SPDR S&P 500 Index – Best Index to Track the S&P 500
The S&P 500 is a stock market index that tracks 500 of the largest companies listed in the US. First launched in 1926, the index has made average annualized gains of over 10% per year since its inception.
The S&P 500 consists of companies from both the NASDAQ and NYSE. Regarding the former, this means that your index fund investment will consist of shares such as Apple, Amazon, IBM, and Microsoft. Over on the NYSE, you’ll be holding shares in the likes of Johnson & Johnson, Disney, Ford Motors, and Novartis.
The best thing about the SPDR S&P 500 is that you be diversified across dozens of individual sectors at the click of a button. Attempting to do this on a DIY basis would not only be time-consuming, but extremely expensive when you factor in brokerage fees, so there’s no doubt this is one of the best index tracker funds of 2020.
In terms of choosing a provider, your best bet with this one is to consider a UK broker. This is because the likes of Hargreaves Lansdown allow you to invest from just £100. eToro is even more attractive to those looking to inject small amounts, as the investment platform allows you to invest from just $50 into the SPDR S&P 500 fund.
Your capital is at risk.
3. Vanguard Total Stock Market Index Fund – Best Index to Track Large and Small US Companies
While the S&P 500 is focused on the largest stocks in the US in terms of market capitalization, this particular tracker fund is a lot broader. This is because the index tracks small, medium, and large-cap firms. Each and every stock held by Vanguard will be publicly-listed in the US, so this is a great way to gain exposure to the American economy.
To ensure the index fund is reflective of the wider US markets, Vanguard weights its portfolio heavily in favour of dominate players. For example, it’s top 10 holdings includes Apple, Visa, Alphabet, Berkshire Hathaway, and Amazon. With that being said, the Vanguard Total Stock Market Index Fund also allocates capital across a significant number of high-growth shares.
These are typically companies that are yet to make it big in their respective sector, so both the risks and rewards are much higher. We should note that the UK version of the Vanguard index funds website does not allow you to invest in this particular index fund. However, there are several UK brokers that give you access – namely eToro and IG.
Your capital is at risk.
4. FTSE SmallCap Index – Best Index to Track Small UK Companies
In a similar nature to the Vanguard Total Stock Market Index Fund, the FTSE SmallCap Index gives you exposure to smaller companies. However, you will be focusing exclusively on firms listed in the UK. Furthermore, this index does not contain any large-cap stocks.
Instead, you will be investing in a full basket of up and coming firms, or established companies that have smaller market capitalizations. On the one hand, this does mean that the FTSE SmallCap Index comes with much higher risk levels. After all, you are potentially investing in companies that are yet to prove their business model.
On the other hand, you do have the opportunity to target larger returns. Crucially, this index allows you to invest in higher-growth stocks in a diversified manner. This is because your portfolio will contain hundreds of firms from dozens of sectors. The only drawback with this index is that very few constituents will pay dividends.
Your capital is at risk.
5. iShares MSCI China ETF – Best Index to Invest in China
This is another one of the best index tracker funds of 2020. China is home to one of the largest stock markets globally. In a time not so long ago, being able to invest in Chinese firms would have been a difficult task as an everyday UK retail client. However, with the introduction of the iShares MSCI China ETF – you can now do this at the click of a button.
The index itself consists of over 600 Chinese stocks, so you will be investing in a completely diversified manner. In terms of weighting, the ETF provider allocates funds based on market capitalization. For example, Alibaba Group and Tencent each contribute 19.21% and 14.38%, respectively.
Then you have the likes of Meituan Dianping and China Construction Bank at 4.20% and 2.51%. If you like the sound of the iShares MSCI China ETF, the provider charges a rather steep expense ratio of 0.59%. However, eToro allows you to invest on a commission-free basis with no ongoing charges. Best of all, you can invest from just $50.
Your capital is at risk.
How do Index Funds Work in the UK?
UK index funds offer a simple and cost-effective way to buy a basket of shares. Whether you’re keen on UK stocks or a portfolio of international firms, index funds likely have a market to suit your requirements.
However, it’s important to first have an understanding of how index funds work in the UK before parting with your Money. With this in mind, we would suggest reading through the sections outlined below.
Index Funds Track Multiple Companies
First and foremost, by investing in an index fund you will be buying shares in multiple companies. Most indexes look to track a specific marketplace – such as the London Stock Exchange. For example, an index tracking the FTSE 100 would consist of the 100 largest companies publicly-listed in the UK.
Over in the US, popular indexes include the Dow Jones – which tracks 30 large-scale American firms from several industries. You then have the NASDAQ 100, which is an index that tracks the 100 largest stocks listed on the respective exchange. However, we should note that there are also index funds that track stocks from several international exchanges.
For example, the FTSE All-World UCITS ETF will track the stock price of over 3,400 companies from 50 different countries. This allows you to create a huge portfolio of international stocks with ease.
You’ll be investing in an ETF
ETFs allow you to invest in a basket of assets via a single trade. They are run and managed by large-scale financial institutions. Think along the lines of Vanguard and iShares.
The provider in question will offer an ETF that seeks to track a specific marketplace. This might be something simple like the FTSE 100, or a broader area of the investment space like dividend stocks or corporate bonds. In fact, ETFs can track virtually anything – which makes them highly conducive for investing in an index.
Here’s an example of how an index fund investment would work when utilizing the services of an ETF.
- You invest £2,000 into a Vanguard ETF that tracks the Dow Jones
- Vanguard will personally purchase and hold stocks in all 30 companies that make up the Dow
- The Dow Jones finishes the year 20% higher
- As such, your investment is now worth £2,400
On top of the above, you will also be entitled to your share of any dividends that are paid by companies listed on the Dow Jones.
Index Fund Weighting
Irrespective of the index fund you are looking to invest in, all ETF providers will ‘weight’ their portfolio. In simple terms, this means that companies with a larger market capitalization will constitute a higher percentage of the index fund.
For example, if you were to invest in the NASDAQ 100, then companies like Apple, Microsoft, and Alphabet would have a much larger weighting than the likes of Skyworks, Verisign, and Alexion Pharma.
The specific weighting of each company will have a direct impact on where your money goes.
For example, let’s suppose that HSBC has a 4% weighting on the FTSE 100. If you invested £10,000 into an ETF that tracks the index, then you would effectively be holding £400 worth of shares in HSBC. Similarly, if BP had a weighting of 3%, then you would hold £300 worth of BP shares.
Although most index funds in the UK base their weighting system on market valuation, some will take a more unconventional route. For example, the Dow Jones gives preference to constituents with a larger share price, even though they might have a much smaller market capitalization.
How do you Money From an Index Fund?
So now that you know how UK index funds work, we need to explain how you stand to make money from your investment. In a nutshell, this comes in two forms. Firstly, you will make money when the net asset value (NAV) of your portfolio increases. Secondly, you will make money if and when companies within the index pay dividends.
Let’s explore each revenue stream in a bit more detail.
Net Asset Value (Nav)
The NAV is the most common way to calculate the value of an index fund investment. In its most basic form, the NAV takes all of the assets held by the provider, multiplied by the current value of each asset.
For example, if the index fund was tracking the FTSE 100, then you would need to take the stock price of each constituent, and then multiply it by the number of shares held by the ETF provider. The main premise here is that if the value of the shares goes up, as will the NAV. In turn, this will increase the value of your investment.
- Let’s suppose you invest £10,000 into an ETF index fund that tracks the S&P 500
- At the time of the investment, the fund has a NAV of £1.5 billion
- At the end of year one, the NAV has increased by 10%
- This means that the total NAV now stands at £1.65 billion
- Your investment would have also increased by 10%
- As such, your £10,000 investment is now worth £11,000
You do, however, also need to factor in potential index fund fees – which we will discuss later.
If you invest in an index fund that contains dividend stocks, then you will be entitled to your share of any proceeds. The amount that you are entitled to will depend on:
- The weighting that the dividend-paying company has in the index fund
- The amount that you have invested in the index fund
- Let’s suppose that you invest £10,000 into a FTSE 100 index fund, which contains shares in AstraZeneca
- We’ll say that AstraZeneca has a weighting of 7% on the index
- In effect, this means that you hold £700 worth of shares in AstraZeneca
- Throughout the year, AstraZeneca pays a dividend yield of 5%
- On a total holding of £700 in AstraZeneca shares, you will receive £35 in dividends
It is important to note that you will not receive your share of dividend payments on the same day that they are distributed by the respective company. After all, UK index funds might contain dozens, if not hundreds of individuals dividend-paying companies.
This would make it highly inefficient for the ETF provider to keep making individual payments to its investors. With this in mind, ETF index funds will typically make a batch payment on a quarterly basis. This is also the case with ETFs that invest in coupon-paying bonds.
What are the Benefits of Investing in a UK Index Fund?
There are dozens of ways to access the financial markets from the comfort of your home. But, are index funds right for you and your long-term investing goals?
To help clear the mist, below you will find a number of reasons why index funds are popular with UK investors.
Enjoy Passive Income
In theory, by investing in an index fund, you stand the chance of earning passive income. We say ‘in theory’, as there is no guarantee that you will make money from your investment. However, the key point here is that once you inject funds into your chosen index fund, there is nothing more for you to do.
This is in stark contrast to a DIY investment strategy. After all, you will be required to constantly monitor the financial markets. You will also need to perform in-depth research on a company before making an investment. This is hugely time-consuming, so index funds are a great way to invest without needing to be active.
Perfect for Beginners
If you are the type of individual that has never placed a single stock trade in your life, then there is no better way to access the markets than an ETF index fund.
This is because you will not be required to have any knowledge of how to pick stocks and shares. You won’t need to have any experience of reading complex charts or financial reports, either. Instead, the process of buying and selling shares is taken care of by your chosen ETF provider.
The only decision that you need to make is with respect to the index that you wish to track. This doesn’t have to be an elaborate process, as most newbie investors will opt for the likes of the FTSE 100, S&P 500, or Dow Jones.
Diversifying in a Low-Cost Environment
When you use a traditional stock broker, diversifying can be challenging. For example, let’s imagine that you wanted to invest in the 100 companies that make up the FTSE 100.
In doing this on a DIY basis, you would need to place 100 individual orders. If using a broker that charges a flat commission fee, this would be extremely expensive. When it comes to withdrawing your investment, you would need to repeat the same process – but in reverse.
The good news is that by investing in an index fund via an ETF provider, you will only be required to place a single trade. This means just one order and one commission fee. In fact, when using the likes of eToro, you won’t be charged a single penny in commission when investing in stocks or ETFs.
What are the Risks of Investing in Index Funds UK?
Although index funds are a great way to gain exposure to the financial markets in a simple and low-cost manner, there are several risks that you need to consider before making an investment.
You Might Miss out on Other Investment Opportunities
When you invest in an index fund, the ETF provider is tasked with one objective – tracking the index. This means that you are somewhat limited in which stocks you can invest in. A prime example of this Tesla. Although the US electric car maker is now one of the largest companies in the world in terms of market capitalization, it was recently snubbed by the S&P 500 index.
As such, you would need to go and make a separate investment into Tesla if you wish to add it your portfolio. This isn’t a major issue, but more of a reminder that by relying exclusively on an index fund, you might be missing out on other opportunities.
You Won’t be Protected by a Market Downfall
Investing in an index fund does not protect you from a market downfall. On the contrary, the index fund will drag you down with it. After all, you are investing in a financial instrument that is tasked with tracking a group of stocks. If, for example, you were invested in the FTSE 100 during the 2008 financial crisis, you would have been looking at double-digit losses by the end of 2009.
The only way to have avoided this would have been to exit your position. With this in mind, some argue that UK index funds aren’t fully passive. This is because you still need to have a firm understanding of what is happening in the wider markets. Ultimately, the ETF provider will continue to track the index irrespective of how it is performing!
Some Index Funds are Involved in High-Risk Investments
All index funds carry an element of risk – more so than others. This is especially the case with index funds that are tasked with tracking stocks from the emerging markets. Sure, high-growth shares in India and South Africa can net you amazing returns.
But equally, they can also be responsible for major losses. Similarly, index funds that track small and medium-cap stocks are fraught with risk. This includes firms listed on the UK’s AIM and the Russell 2000 in the US.
How to Choose the Best Index Funds for you
Make no mistake about it – there are hundreds of index funds in the UK to choose from. This can make it extremely difficult to know where to put your money – especially if you’re a newbie.
To help you choose the best index funds in the UK, be sure to make the following considerations.
Do you Want to Investment in UK or Foreign Stocks?
You first need to assess which marketplace you wish to target. For example, some investors prefer to stick with what they know by investing in an index fund that tracks the UK companies. In other cases, some investors prefer to gain exposure to international stocks – such as those based in the US. Additionally, you might consider investing in an ETF index fund that tracks domestic and international firms.
How Much Risk do you Feel Comfortable Taking?
Each index fund will come with its own perceived risk levels. At one of the end spectrum, index funds that invest in high-grade stocks listed in the UK and US are considered to be lower risk. Think along the lines of Amazon, Apple, Coca Cola, GlaxoSmithKline, and British American Tobacco.
These are companies that have gone through recession after recession – but have always recovered. If this is what you are interested in, then you’ll be best suited for index funds that track the likes of the Dow Jones, S&P 500 or FTSE 100.
At the other end of the spectrum, there are higher risk index funds – such as those that track small-to-medium companies or stocks based in the emerging markets. Ultimately, you need to assess the level of risk that you are comfortable taking before choosing an index fund.
Are you Looking for Growth or Income?
You then need to decide whether you prefer UK index funds that are focused on growth or income. Regarding the former, these are index funds that have a good chance of outperforming the market.
A prime example of this is the UK’s secondary stock exchange – the AIM. That is to say, while very few stocks listed on the AIM pay dividends, they do offer much higher growth potential. If this is what you are after, you’ll need to select an index fund that tracks smaller companies.
However, if you are more interested in income, this means that you will need to focus on index funds that track dividend-paying companies. A good example of this is the Dow Jones. This is because all 30 companies that make up the index pay dividends. While these firms might have plateaued in the growth department, you’ll benefit from a stable dividend policy.
Best UK Brokers for Index Funds
By this point in our guide, you should have a firm idea of the type of index fund that you wish to invest in. If so, you now need to find a UK broker that not only lists your chosen fund – but one that meets a range of important requirements. For example, your choice of broker needs to be FCA regulated, offers competitive fees, and support your preferred payment method.
To help point you in the right direction, below you will find a selection of UK brokers that allow you to invest in index funds in a simple and cost-effective manner.
1. eToro – Overall Best Index Fund Broker in the UK
With over 12 million investors under its belt, eToro is now one of the most popular brokers in the online space. The main attraction for investors that eToro allows you to invest in stocks and ETFs in a truly fee-free manner. This is because you will not pay any trading commissions, nor will you be required to pay any ongoing maintenance fees.
On the contrary, all share and ETF purchases are essentially free. The only fee that you need to be aware of is a 0.5% currency conversion charge when depositing funds, and a $5 withdrawal fee. In term of its index fund offering, eToro allows you to access over 150+ ETFs. There are ETFs that cover the FTSE 100, Dow Jones, and S&P 500. There are also index fund ETFs that track the emerging markets – including the Chinese stock exchange.
What we also like about eToro is that the platform was designed with newbies in mind. You can open an account in minutes, and then invest from just $50 into your chosen ETF. Getting money into your trading account is also straight forward, as you can instantly deposit funds with a UK debit/credit card or e-wallet. Crucially, eToro is licensed by the FCA. The platform is also covered by the FSCS protection scheme. This means that a brokerage collapse would protect the first £85,000 that you have invested.
|Inactivity fees||$10 a month after 12 months inactivity|
- Super user-friendly online trading platform
- Buy stocks without paying any commission or share dealing charges
- Trade CFDs in the form of stocks, indices, commodities, forex, and more
- 800+ stocks listed on the UK and international markets
- Deposit funds with a debit/credit card, e-wallet, or UK bank account
- Ability to copy the trades of other users
- FCA and FSCS protections
- Not suitable for advanced traders that like to perform technical analysis
75% of retail investors lose money trading CFDs at this site
2. Plus500 – Commission-Free CFD Trading Platform
If you’re looking to do more than simply invest in an index fund, you might want to consider CFD trading platform Plus500. By this, we mean that Plus500 allows you to profit from both rising and falling markets. For example, if you think that the value of your chosen index fund is likely to increase, you’ll be placing a buy order. If you think the opposite, you’ll place a sell order.
This flexibility ensures that you can target profits even when the wider index is down. An additional benefit of trading index funds at Plus500 is that you can apply leverage. This stands at up to 1:20 if you’re UK retail client and trading major index funds. As such, a £200 deposit would allow you to trade with up to £4,000. If trading a minor index – such as those based in South Africa, Norway, or Italy – you’ll get leverage of 1:10.
All tradable instruments at Plus500 – including its index fund CFDs, are commission-free. You will also benefit from free deposits and withdrawals, and tight spreads. Getting started with Plus500 will require a small deposit of just £100. Much like eToro, you can instantly fund your account with your UK debit/credit card or Paypal. Plus500UK Ltd is authorised & regulated by the FCA (#509909). Its parent company is listed on the UK stock market.
|Inactivity fees||$10 per quarter after 3 months inactivity|
- Commission-free CFD platform – only pay the spread
- Thousands of financial instruments across heaps of markets
- Retail clients can trade stock CFDs with leverage of up to 1:5
- You can short-sell a stock CFD if you think its value will go down
- It takes just minutes to open an account and deposit funds
- More suitable for experienced traders
80.5% of retail investors lose money trading CFDs at this site
3. IG – Trusted UK Trading Platform With 17,000+ Markets
IG is a well-known brokerage house that offers over 10,000 shares and ETFs. This means that you will have access to an extensive library of index funds. Its share dealing department charges £8 per trade, or £3 per trade when you surpass three buy or sell orders in a month. Additionally, IG also allows you to trade index funds via CFD instruments or through its spread betting facility.
Both trading options can be accessed with leverage of up to 1:20 and 1:10 on major and minor indexes – respectively. Once again, going the CFD-route allows you to choose whether you think the index will increase or decrease in value. We should also note that IG offers a couple of ways to reduce or completely avoid capital gains tax. Firstly, if you choose to invest in an index fund ETF – you can shield the first £20,000 from tax by opening an ISA.
Alternatively, by trading index funds via its spread betting marketplace, all profits are exempt from tax. This is because spread betting falls within the remit of gambling. You will need to meet a slightly higher account minimum of £250 at IG. You can meet this with a UK debit card or by transferring funds from your bank account. In terms of safety, IG was first launched in 1974 and is now a public company listed on the London Stock Exchange. It holds several licenses – including with the FCA.
|Commission||0% commission on all CFD instruments apart from shares. Fees vary depending on the exchange.|
|Deposit Fee||Free (0.5%-1% fee on credit cards)|
|Inactivity fees||£12 a month after 2 years inactivity|
- Trusted UK broker with a long-standing reputation
- Good value share dealing services
- Leverage and short-selling also available
- Spread betting and CFD products
- Access to the UK and international markets
- Great research department
- A minimum deposit of £250
- US stocks have a $15 minimum commission
How to Invest in Index Funds in the UK
Ready to invest in an index fund right now? If so, follow the walkthrough outlined below!
Step 1: Open an Online Trading Account
Your first port of call will be to open an online trading account with your chosen broker. In our example, we are going to show you how to do this with FCA regulated platform eToro. This is because the broker allows you to invest in index fund ETFs without paying any fees.
Upon electing to open a share dealing account on the eToro homepage, you will be asked to enter some personal information. On top of providing your contact details, you will also be asked to quickly upload a copy of your ID and a proof of address.
Step 2: Deposit Funds
You will now need to meet a $200 minimum deposit.
You can choose from the following payment methods:
- Debit Card
- Credit Card
- Bank Transfer
Don’t forget, all eToro deposits come with a 0.5% currency conversion fee. After this, the only other fee that you need to factor in is its $5 withdrawal charge.
Step 3: Choose an Index Fund
Once you have funded your account, you’ll need to find an index fund to invest in. You can browse the many funds on offer by clicking on ‘Trade Markets’, followed by ‘ETFs’.
If you already know which index fund you wish to invest in, eToro allows you to search for it. Once your fund loads up, click it.
You will then need to click on the ‘Trade’ button.
Step 4: Select Investment Amount and Confirm Order
The final part of the process will require you to enter the amount that you wish to invest. This needs to be at least $50 – which is about £40. Once you confirm the order, your index fund investment is complete.
You will remain invested in the fund until you decide to cash out your position.
With hundreds of index funds to choose from, knowing which provider to go with can be difficult. As such, we hope that our list of the best UK index funds has helped point you in the right direction. If none of the options listed on this page are of interest, we have also outlined some handy tips on how to find an index fund yourself.
Nevertheless, if you do know which investment fund you wish to invest in, eToro allows you to do this without paying any fees. This means no dealing charges and no annual maintenance fees. You can instantly deposit funds with a UK debit/credit card or e-wallet – and the minimum investment requirement stands at just $50!
eToro – Invest in Index Funds with 0% Commission
75% of retail investor accounts lose money when trading CFDs with this provider.
How do you invest in an index fund?
The easiest way to invest in an index fund is to do this via an ETF. You will need to invest in your chosen ETF through an FCA broker.
Do index funds pay dividends?
Yes - if your chosen index fund contains dividend-paying companies, you will be entitled to your share. ETF index funds typically distribute dividends every 3 months..
What is the best index fund to track the FTSE 100?
There are heaps of index funds that track the FTSE 100. This includes ETFs provided by iShares, Vanguard, and SDPR.
How much do index funds cost?
If you invest in an index fund directly with the respective provider, you will usually pay an ongoing maintenance fee. This is usually less than 0.5% per year. The amount you pay is based on the percentage charge and the amount you have invested.
How do you withdraw funds from an index fund?
If your index fund was purchased via an ETF provider, you can usually withdraw your funds out at any time during standard market hours..