HSBC FTSE 250 Index Class S - Accumulation (GBP)

The chart shows how the fund's performed against the FTSE 250 Index. Since launch, it's tracked the index closely, though over time it's fallen behind due to the costs involved with running a fund. Even though the fund's charges are low, they'll continue to pull back performance slightly. This is the same for every tracker fund. The HSBC FTSE 250 index fund has recently altered the way it calculates its ongoing charges figure (OCF) in line with recommendations from the Investment Association. Incorporating the new guidance leads to a material increase in the OCF for the HSBC FTSE 250 Index fund.However, this does not represent an increase to actual management or operational costs investors in the fund experience. These costs have always existed and have been reflected in the performance of the funds. This is only a change to the way costs are disclosed.

Tracker funds are one of the simplest ways to invest. They aim to match the performance of an index like the FTSE 250, rather than beat it. They usually do this by investing in every company in the index. This means they don't need analysts to research individual companies, which keeps costs to a minimum. If the fund's costs are low it's likely to track the index more closely over time.

HSBC has a straightforward approach to managing this fund. They invest in every company in the FTSE 250 Index and in the same proportion. This is called 'full replication' which minimises the risk of the fund differing too much from the index. They currently don't lend shares to other companies, like some other tracker managers do with a view to reduce costs, as this would add risk to the fund.