Index verses Tracker Fund - Which is better

jamesd

Both trackers and actively managed funds have their places.

Trackers are an excellent choice for people who will not pay any attention to their investments after putting the money in. This is because they guarantee just below market performance. An active managed fund an either exceed the market or do significantly less well and the latter is often prompted by a change in manager. Someone who is not paying careful attention won't be aware of the change of manager and won't have the chance to switch out before such a change from better to worse performance.

Active fund managers often take views on the economic situation and where we are in the economic cycle. Someone who is actively using active managed funds can pick managers whose views agree with their own and if both are right can benefit more than just a tracker may benefit.

Active managers can follow approaches like value investing while trackers don't (in general, some are now around that try to use calculations that might or might not work like value investing).

Active managers can try to adjust the risk level of the fund compared to the market, either being more cautious or less. That can be of value to people who want to invest in a particular area but don't want the normal range of value variations in that area.

This is currently one of the most controversial topics in investing.

CLAPTON

would seem to me that the title of this thread says
"Index verses Tracker Fund - Which is better"

whereas the content of the question is about comparing 'trackers' with 'managed funds'

very confusing

wriggly

Well, the title question is easy to answer: "tracker" and "index" funds are the same thing. Funds that track an index are usually called "index funds", except for some funds in the UK which are called "tracker funds".