We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
We're aware that dates on the Forum are not currently showing correctly. Please bear with us while we get this fixed, and see Site feedback for updates.

How about an FTSE tracker?

Hello

Would this be a good option as the FTSE is so low at the moment?

How do they work? Do you buy a set of shares that are intended to represent the FTSE as a whole? If so, does that mean that there will be a lot of expenditure on commissions if you need to have shares in many different companies?

Thanks

Comments

  • tradetime
    tradetime Posts: 3,200 Forumite
    edited 8 April 2009 pm30 9:30PM
    One way would be to use an ETF such as iShares FTSE 100 or iShares FTSE 250
    They trade like a single stock, in the case of those two on the LSE, you just buy and sell them like a normal company stock, although there is no stamp duty.
    Hope for the best.....Plan for the worst!

    "Never in the history of the world has there been a situation so bad that the government can't make it worse." Unknown
  • turbobob
    turbobob Posts: 1,500 Forumite
    If you want exposure to the FTSE indices then yes they are a good option. Whether that's what you want is up to you to decide ;) You don't say which FTSE index - there are a few. The FTSE All Share is probably the broadest UK one, being made up of FTSE100 (top 100 companies), FTSE250 (next 250 biggest) and the FTSE Small Cap index, and weighted by the size of each company. By its nature, its heavily dominated by the largest FTSE100 companies, but offers some exposure to mid and small caps.

    Common ways of tracking the index are through unit trusts/OEIC's. Investors money is pooled together and used to buy shares which aim to replicate the makeup of the index. There are costs involved - look for the "Total Expense Ratio" which is basically the running cost of the fund including its dealing costs. They are fairly low on most UK trackers though (one I looked up is as low as 0.3% a year).

    ETF's (exchange traded funds) are another option. They are effectively shares that track various indices and are traded on the stockmarket. If you decided you wanted to "trade" more actively these might be something to go for.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.4K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.4K Spending & Discounts
  • 241K Work, Benefits & Business
  • 617.3K Mortgages, Homes & Bills
  • 175.7K Life & Family
  • 254.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.