Index trackers....best buy ???

Other bad points compared to a tracker fundis that it doesn't offer a dividend and it forces you to close your investment at a given time. So you can't lock it away for decades as a core part of your portfolio.

Hi

Is this HSBC a good Index Tracker?

http://www.hargreaveslansdown.co.uk/siteredesign/fund_facts/ff_glance.asp?fund_id=2584

Is this HSBC a good Index Tracker

Really no such thing as a good or bad tracker. Those tracking a particular index are all doing the same thing - only the charges vary.

So, if you must invest in a tracker, just go for the one with the lowest charges.

Be aware, however, that the FTSE 100 has just four sectors which make up over 55% of its total - banks, pharmaceuticals, telecommunications and oils.

Now that is risk.

So, again, if you must invest in a tracker, consider one which tracks either the FTSE 250 or the All Share.

In the FTSE 250, for example, the above four sectors represent just 30% of the total with more exposure to 27 other diverse sectors.

• For those who think that investing in Blue Chips is preferable to riskier Smaller Companies, it is a fact that, since statistics were first collated (and in the UK the Hoare Govett Smaller Companies Index has now been going for over 50 years), Smaller Companies have outperformed Blue Chips over virtually every discrete period.

• The best form of risk reduction is diversification. This means a good spread of investments in different funds (managed by different houses), across different asset classes and different international markets.

Be aware, however, that the FTSE 100 has just four sectors which make up over 55% of its total - banks, pharmaceuticals, telecommunications and oils.

Now that is risk.

Thats the biggest problem with the FTSE 100. Plus you have Labour and their taxation which hits this sector heavily. Banks/Insurers got clobbered back in 2001. Oil companies have that new windfall tax against them announced the other day. How long is it before Gordon Brown decides to raid the others. pharmaceuticals could be a target if GB decides that the cost of running the NHS needs to be looked it and they should pay more towards it by one means or another.

In the FTSE 250, for example, the above four sectors represent just 30% of the total with more exposure to 27 other diverse sectors.

Although I dont look to invest specifically in managed or tracker, I have to say, that I have used a certain 250 tracker in the portfolios I arrange.

Only if it's your only product.

I agree. Problem is that its mostly sold by banks or inexperienced advisors or bought without advice. The people buying generally dont understand stockmarket investing and dont understand diversification. I was up against a bank advisor recently (poor sod didnt have a chance). His idea of diversification was putting all the money with them into 3 versions of their GEB.

This weeks mystery shopper in Financial Advisor paper spoke to a bank financial advisor who had never heard of wraps and didnt know what they were. He of course wouldnt need to know about fund supermarkets/wraps as tied advisors are not allowed to recommend investment funds. This is why banks go all out with these GEBs. No fund selection/sector selection involved. GEBs have nice sound bite style features with limited options. More options means more discussion and more confusion if not handled correctly. Meaning less chance of a "sale". Sales are only what the banks are interested in. ....hmm, going a little OT there.

Are there any international trackers you use to get round this problem?

No. I focus on sectors more than funds. The funds I then select outside of the UK, tend to be managed. Most common reason for that is limited availability or limited asset spread within the index being tracked.

kinster wrote:

oh dear, I already know this. I'm asking about the charges here.

If you just want to compare charges why don't you look somewhere like here;

http://www.bestinvest.co.uk/funds/fmpro?-DB=webprices.fp5&-Lay=fund_info&-format=fundperflist.htm&-error=fundperflist.htm&-SortField=invname&-max=200&-find=&calc_fundtype=open&groupcode=&invname=uk+tracker&fundsize=&netyield=&calcsector=&assetclass=&Theme=&portfolio_turnover+charge+best=&fundmanager%3A%3Amanagername=&-op=gt&manterm=&initial+charge+best=&total_ann_cost+charge+best=&total_ann_cost+charge+best=