Index Tracker Funds

StevieJ

Take a look at the sector split on this fund, it appears that IP are very confident about the bond market as they appear to be gearing up, I have not noticed this before but it makes some sense with low interest rates and high bond yields. What do others think ?

http://www.h-l.co.uk/funds/security_details/sedol/3302888

Masomnia

I did decide to put some money in a tracker, and set up a direct debit to even out ups and downs.

Tracked the FTSE All Share, as it meant less exposure relatively towards banks and other financials I guess, plus it's more diverse anyway. I decided that with a low market to begin with, and a long term (5+ years) I'd be likely to make a decent return.

Personally, I'd rather have something consistently mid-table with lower charges, thatn something that's more up and down. But that's just me

StevieJ

dunstonh wrote: »

Equity income funds ranged from medium to high risk so they tended to stagger either side of an index tracker as far as risk goes. What has "generally" happened is the higher risk versions have gone down by more than the lower risk versions.

However, having done a quick comparison of the two sectors by dumping them into a single list with 12 month performance, there are far more equity income funds at the top end than UK all companies funds. No surprise that its mid caps that seem to be at the bottom end. The old favourite Inv Perp High Income proving to be as consistent as ever. (its currently showing as lower risk than the L&G Index tracker and showing -7.1% over 12 months compared to sector average of -18.2%, That compares to -22.1% for L&G index tracker and -24.8% for uk all companies sector average)

The UK equity income sector is about to be shaken up with a new UK Equity growth and income sector being created and the funds in there being split between the two. This should help identify those that need the dividends more and perhaps have higher risk than those that do not.

Of course 'needing the dividends' can cut both ways, I always thought that the income funds dodged the internet companies because they did not pay dividends in the last crash ( thus, more by luck than judgement IMO) and so outperformed the market.

sabretoothtigger

Masomnia wrote: »

Tracked the FTSE All Share, as it meant less exposure relatively towards banks and other financials I guess, plus it's more diverse anyway. I decided that with a low market to begin with, and a long term (5+ years) I'd be likely to make a decent return.

Here you go:
http://www.h-l.co.uk/funds/security_details/sedol/0103653




11% of the all share is in banks, 7% alone in hsbc

Masomnia

sabretoothtigger wrote: »

Here you go:
http://www.h-l.co.uk/funds/security_details/sedol/0103653

11% of the all share is in banks, 7% alone in hsbc

Cheers for that, it is less exposed to banks than the UK 100, so I'm pleased with that. I suppose HSBC is the best of a bad bunch, and given that I'm investing long term and I'm expecting some recovery in the financial sector in that time frame it may be ok.

dunstonh

When you get the offical 2008 figures for that table you gave could you let us know, Im interested to see how it compares

Normally it happens about 9-10pm at night but I dont think it will happen tonight or tomorrow.

I did decide to put some money in a tracker, and set up a direct debit to even out ups and downs.

Small amounts and lazy investing are often good reasons for going with a tracker.

sabretoothtigger

Yea you could do worse and its natural to think home markets are safer and I think thats the traditional advice
Im inclined to think that growth elsewhere will be greater and the uk will play a part as manager of investments more then the actual producer of returns themselves.
A few of those companies in the all share are at least partially reliant on overseas growth


http://www.breakingviews.com/2008/12/22/Globalisation.aspx?sg=false

Small amounts and lazy investing are often good reasons for going with a tracker.

I think I should have stuck with trackers all along in that regard

Masomnia

dunstonh wrote: »

Small amounts and lazy investing are often good reasons for going with a tracker.

Haha indeed. In that sense they are definitely useful for me, I'm still learning my way round markets/funds and the like, and don't want to commit to anything more high maintenance.

I'm a little put off by foreign markets. I don't want to invest in anything I don't understand/have little chnce of understanding. I've read a few people on here posting regrets about investing in Russia and India to name two. Maybe I'll look at something with European or American exposure in the near future.

sabretoothtigger

With regular investment you would just need to believe in the long term fundamentals for that market.
If its not going to grow over 10 years then it'd be rubbish but india will imo and now is the time to start if you can as they have fallen back with the rest of the world but will surely rebound much faster imo as they had less to lose in the first place and many other reasons

Compare that to the uk over the next 10 years, Im not so optimistic & though Im sure it'll come good at some point, not so dramatically.

Russia rebounded 40% in nov I think it was. Probably they've lost that again Melodramatic ! :eek:

M271

laffer wrote: »

I was thinking of investing in an index tracker fund. Could anyone suggest particular funds which are relatively easy to access (or an online broker). I would prefer a fund that would allow regular monthly contributions (as opposed to one which requires a single lump sum payment). Anyone have any tips on these investments?

thanks in advance.

I invested £500 in 4 L&G Tracker Funds in mid 2003 and since then have contributed £25 / month into each. I'm not saying that I could have got better returns elsewhere but in general I'm pleased with my decision. I'm going to be putting additional money in S&S ISAs this year and will be comparing Trackers against other higher management fee funds in money supermarkets.

For information in the past 5 years the Trackers have returned the following, even allowing for the big falls in 2008.

Pacific Index ex Japan - 47% (0.75% costs)
European Index - 32% (0.75% costs)
UK Index (All Share) - 20% (0.5% costs)
Global 100 Index - 9% !! (Heavily US based) (1.0% costs)


As you can see there are big differences in the historic returns, who knows what the future will be ? but I do think that the Pacific Index is where I will look to contribute extra going forward, it aims to track the FTSE Pacific ex Japan and by country investments by % are as follows:

Australia 34.79
Hong Kong 21.42
Korea, Republic Of 18.11
Taiwan 15.85
Singapore 7.32

China 1.71