What Index Tracker to Pick?

Richie1965

Hi
I wanted to take out an Index Tracker but don't know what indices to track? I know there are several Uk indices and also different overseas indices?

Is there anywhere in this site or another website, magazine, paper, etc that would help me make an informed decision?


Thx R.

Rollinghome

Richie1965 wrote: »

Hi
I wanted to take out an Index Tracker but don't know what indices to track? I know there are several Uk indices and also different overseas indices?

Is there anywhere in this site or another website, magazine, paper, etc that would help me make an informed decision?

There's not really a definitive answer to that: depends entirely on what you want to achieve.

For a core holding most people are likely to choose the FTSE All-share which includes both the biggest UK companies and many of the smaller companies too. If you wanted just the biggest companies then you'd choose the FTSE 100 index. You can read what the various indices cover at www.ftse.com/Indices/UK_Indices/index.jsp .

For very good free advice try www.candidmoney.com which is the website of Justin Modray who you may have seen on various TV and radio finance programmes.

dunstonh

I wanted to take out an Index Tracker but don't know what indices to track?

If you are going to build your own portfolio rather than an "off the shelf" version then you need to look at most, if not all major sectors. Otherwise you are going to compromise your exposure. That said the FTSE all share is fairly global but also a bit limited if you are looking at asset allocation rather than sector allocation (in this sense asset allocation = industries and sector allocation = regional or asset class).

Remember that investing is about opinion. Everyone has views and opinions, methods and strategies which will differ. It doesnt mean some are right and some are wrong. As long as you avoid fashion investing and diversify and remember to rebalance then the methods you use will just be your opinion.

Richie1965

Thankyou both for the great answers.

I'm really looking for growth mainly, medium/high risk. I will look at the links you provided and also the ftse all share. I'm not sure about the Asset, Industry, Sector split?

A little confused????

Thx R

smallfry27

Richie1965 wrote: »

I'm really looking for growth mainly, medium/high risk. I will look at the links you provided and also the ftse all share. I'm not sure about the Asset, Industry, Sector split?

At the risk of boring regular readers of this forum, you could try Tim Hale's book 'Smarter Investing'. He describes a lot of the indices towards the back of the book.

He classifies all equity as growth with risk, the choice within that is geographic and by size of company. There are also some property and commodity indices. There are several suggestions on the proportions but it still leaves you with a lot of choice.

Richie1965

Thankyou I'll have a look at the book. I'm sure Amazon will have it.

Thanks again.

yelf

Id pick the MSCI world index personally