Emerging Markets and Commodities

Ark_Welder

Do you know the composition of the indices in which you have an interest? If not, how do you know that they are something that you would wish to track - even if their charges appear to be cheaper and their performance 'better'? Knowing why a managed fund has over or under-performed an index can be what is important.

Linton

The EM indices are a charged for service. They are not like the FTSE100 which is a publicly available list of the 100 companies listed on the LSE with the highest market capitalisation (total value of all shares).

masonic

SteveSilva wrote: »

I was under the impression they were managed funds rather than simple trackers which charge less?

You should never choose an investment just on the basis of charges.

masonic

SteveSilva wrote: »

Some good replies there, its not so clear to me when a fund is a tracker or managed. I know Index usually means tracker and have lower fees, but its not always clear. Isn't there a simple way of telling?

Perhaps this question still hasn't been adequately answered. The simplest way of telling is probably by comparing the TER of a fund with other funds in the same sector. As a rule of thumb, good tracker funds will have a TER that is significantly less than most other funds in the same sector. If it isn't clear, then the fund is either actively managed or it is too expensive. Expensive tracker funds carry all of the disadvantages of managed funds, but have none of the advantages.

The proper way of telling whether a fund is actively or passively managed is by reading the fund prospectus, which is something you should always do before investing.

Ark_Welder

masonic wrote: »

The proper way of telling whether a fund is actively or passively managed is by reading the fund prospectus, which is something you should always do before investing.

I just thought that this should be put in bold.

sabretoothtigger

masonic wrote: »

You should never choose an investment just on the basis of charges.

Yep this is why I chose FTSE over JPM India ten years ago. Guess which quintupled :mad:



There is tons of ETF trackers for BRIC and others

SteveSilva

Thanks guys,

I think with specialist markets like EM and Commodities it can be a good idea to go managed.