chapter 10

Tracker funds

Tracker funds, as their name suggests, track a particular investment market, usually a stockmarket index such as the FTSE 100, FTSE 250 or S&P 500. These funds deliver exposure to stockmarkets at very low cost because they do not pay fund managers to try to beat the market by picking stocks they think are going to go up in value.

The active versus passive debate

One of the fiercest debates in the investment industry is whether it is actually worth paying for active fund management. In the good old days when markets were regularly delivering double-digit returns, people were less concerned at the fund manager taking 1 or 2 per cent out of the pot for their costs.

But the difficult economic conditions of recent years, ...

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