FTSE All-Share Tracker Fund Returns: A Decade of Growth
Discover the FTSE All-Share tracker fund returns over the past decade and see how a £20k investment could have grown.
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Introduction
FTSE All-Share tracker fund returns have been a topic of interest for many investors seeking to understand the performance of the UK stock market. Widely regarded as the best measure of overall UK market performance, the FTSE All-Share index includes a broad range of stocks, from FTSE 100 and FTSE 250 companies to a variety of smaller UK firms. But has it delivered good returns over the long term? Let’s explore how much a £20k investment in a FTSE All-Share tracker fund 10 years ago would be worth today.
Tracking the UK Market
When looking at FTSE All-Share tracker fund returns, it’s essential to choose a reliable ETF. One of the notable options is the SPDR FTSE All Share UCITS ETF (Acc) (LSE: FTAL). This ETF has been around longer than many others and reinvests all dividends, which significantly contributes to total returns. Over the past decade, this particular ETF delivered an annual return of 5.7%.
Calculating the Returns
Had you invested £20k in the SPDR FTSE All Share UCITS ETF (Acc) at the start of July 2014, by the end of June 2024, your investment would have grown to approximately £35k. This calculation excludes any investment platform fees or trading costs.
Near-6% Annual Returns: Is It Good?
Achieving a near-6% annual return with FTSE All-Share tracker fund returns is quite decent, especially when compared to cash savings. Until mid-2022, savings accounts were offering a maximum interest rate of about 1%. Therefore, investing your money rather than keeping it in cash savings would have been more profitable.
However, while a 5.7% annual return is satisfactory, it’s not exceptional. There are other investments that could have delivered significantly higher returns over the same period.
Comparing Other Investments
Here’s a comparison to highlight the difference in returns:
- A £20k investment in a global tracker fund like the iShares Core MSCI World UCITS ETF would have grown to about £65k.
- Investing £20k in an S&P 500 tracker such as the iShares Core S&P 500 UCITS ETF would have resulted in approximately £87k.
- £20k invested in Apple shares would have surged to around £275k.
- £20k in Amazon shares would have ballooned to about £320k.
These figures include currency movements, demonstrating the potential for higher returns outside the FTSE All-Share index.
Investing for Stronger Returns
The key takeaway from examining FTSE All-Share tracker fund returns is the importance of diversifying your investment portfolio. Here are a few strategies that could enhance returns:
- Global Approach: Consider investing in global tracker funds to diversify your exposure and capture growth in various markets.
- High-Quality Stocks: Including high-quality individual stocks in your portfolio can significantly boost long-term returns.
A Diversified Investment Strategy
To illustrate the impact of a diversified approach, let’s consider a mix of investments:
- £10k in a global tracker
- £7k in a FTSE All-Share tracker
- £1.5k in Apple shares
- £1.5k in Amazon shares
In this scenario, your £20k investment would now be worth just under £90k. This diversified strategy shows the potential benefits of combining index funds with high-performing individual stocks.
Cherry-Picking Stocks
It’s worth noting that not every stock performs like Apple or Amazon. Many shares yield disappointing returns, and holding onto a winning stock for the long term requires discipline. It can be tempting to sell when a stock doubles or triples in value, but patience can pay off significantly.
Conclusion
FTSE All-Share tracker fund returns have provided a reasonable return over the past decade. However, exploring global markets and incorporating high-quality stocks into your portfolio can enhance your investment outcomes. This mix of index funds and individual stocks illustrates the potential for achieving robust long-term returns.
Investing wisely involves considering various strategies and maintaining a diverse portfolio. If you’re on the lookout for the next big winners like Apple or Amazon, a thoughtful approach to your investments can help you achieve substantial growth over time.
Should You Invest in the SPDR FTSE All Share UCITS ETF Now?
The flagship Motley Fool Share Advisor newsletter, which he has run for nearly a decade, has provided thousands of members with top stock recommendations from both the UK and US markets. Currently, Mark believes there are six standout stocks that investors should consider buying. Interested in seeing if the SPDR FTSE All Share UCITS ETF made the list?
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