Bestinvest says
This fund provides a simple, low cost way of investing in large cap European equities. This index is made up of large, well known companies with global businesses which provides investors with both geographic and sector diversification. European companies have a significant exposure to Emerging Markets and Asia. Investors should be aware, however, that the largest single sector in the portfolio constitutes financials.
The method of replicating the index is called partial representation. This means that the fund does not buy every stock in the index in its attempt to replicate it. The vast majority of shares in the index are purchased but smaller, less liquid and therefore more expensive, stocks are tracked using sampling.
The FTSE World Europe Ex UK is a market capitalisation weighted index and therefore some stocks have a greater weighting and therefore greater effect on performance. By only engaging in partial replication it is possible to keep costs down however the tracking error (divergence from the index as measured by standard deviation) will be higher than a fully replicating tracker.
The fund engages in stock lending, which is the process of lending the stocks out to other investors in return for a payment, which boosts performance. However this introduces counterparty risk to the fund.