n00b question about funds

Loughton_Monkey

In very general terms:

The FTSE 100 companies are the 100 largest capitalised companies based in UK. Chosen simply for their size. Not their growth, dividend performance, or profitability.

The FTSE100 Share Index is, in effect, a 'fund' of equal weightings of those shares.

Conversely, a 'Managed Fund' is, in effect the FTSE100 index - except for a different 100 or so companies. The ones chosen by the fund manager on the odd day he is not (a) on holiday spending his bonus, (b) out to an expensive lunch courtesy of the PR department of his largest invested companies, (c) out to even more expensive lunches courtesy of the PR department of ailing companies trying to get him to invest in them, (d) on an all-expenses paid business trip to Bankok to attend the annual Fund Manager convention, (e) on an all-expenses paid trip to Baden Baden for a seminar entitled 'How to use leveraged offshore hedging futures to zilmerise fund values to maximum performance....", or (f) flirting with the 'office totty'.

[Or even more likely, the funds are chosen by the spotty 19 year old unpaid 'intern' during his gap year from a Philosophy, Politics, and Economics degree at Hull polytechnic]

Svenena

Cynic...

cashbackproblems

How do you find trackers on the HL website, under funds theres nothing about them?? Which are the best trackers, HSBC?

Rob_192

cashbackproblems wrote: »

How do you find trackers on the HL website, under funds theres nothing about them?? Which are the best trackers, HSBC?

Go to the "fund research" tab, and type in "tracker" under the investment name box.

R

DavidHayton

cashbackproblems wrote: »

How do you find trackers on the HL website, under funds theres nothing about them?? Which are the best trackers, HSBC?

I don't think that HL are too keen for you to invest in trackers since HL don't make any money out of them. But, as Rob 192 pointed out, they do sell them and they will tell you about them if you know where to look.

I use the HSBC trackers because they have the lowest charges (or did the last time I looked).

David

Loughton_Monkey

Svenena wrote: »

Cynic...

So would you be if everyone else in the world was stupid.

Ilya_Ilyich

Rob_192 wrote: »

Go to the "fund research" tab, and type in "tracker" under the investment name box.

R

You might have better luck with `index'.

Alternatively just view all investments, rank by charge ascending, and pick the first funds that do what you want.

jimjames

Loughton_Monkey wrote: »

The FTSE100 Share Index is, in effect, a 'fund' of equal weightings of those shares.

I'm not sure if I'm misunderstanding your post but each share doesn't have an equal weighting. You might expect that the FTSE100 being made up of the top 100 shares would mean that each share was 1/100 of the value of the FTSE.

However it is based on the total value of the company so a big company will have a bigger effect on the index than a small one. So for example HSBC has a weighting of 8% of the FTSE 100. So a bad day for HSBC will have a lot more effect than for a company that has less than 1% of the FTSE100 value.

http://www.ftse.com/Indices/UK_Indices/Downloads/FTSE_100_Index_Factsheet.pdf

As per the link above the top 10 constituents of the FTSE100 make up 46% of its value so the other 90% of the FTSE companies only make up 54% of the index - quite a big bias to a few companies.

Derivative

Loughton_Monkey wrote: »

[Or even more likely, the funds are chosen by the spotty 19 year old unpaid 'intern' during his gap year from a Philosophy, Politics, and Economics degree at Hull polytechnic]

Hull polytechnic! I'll have you know we have a proper University

Loughton_Monkey

jimjames wrote: »

I'm not sure if I'm misunderstanding your post but each share doesn't have an equal weighting. You might expect that the FTSE100 being made up of the top 100 shares would mean that each share was 1/100 of the value of the FTSE.

I stand corrected. My writing was (unusually for me I hope) a little bit sloppy in this instance. It doesn't, I think, take away from the thrust of my comment.