Confused about trackers

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  • apollo9
    apollo9 Posts: 74 Forumite
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    Thanks I did make that mistake- the VLS life strategy funds are not trackers !! I need to go back and read the site the audaxer listed.
  • BananaRepublic
    BananaRepublic Posts: 2,103 Forumite
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    apollo9 wrote: »
    My reasoning, albeit naively, is that an active fund manger should be able to select the companies likely to perform better than index, while a tracker would only represent the index and therefore not do as well (in terms of increased gains and limited losses).

    That is the marketing spiel, but in practice most active funds underperform the index, assuming there is an index. The problem is that an active fund manager might have a cool sounding philosophy, but in practice it is quite hard to pick winners. There are active funds that consistently outperform, but they are a minority. I speak as a fan of active funds, but passive funds do have a lot in their favour. Assuming of course that you choose a good index to track, the FTSE 100 for example is perhaps not the most rewarding.
  • apollo9
    apollo9 Posts: 74 Forumite
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    So, any recommendations for trackers? I am trying not to litter the forum with lots of different topics
  • TheTracker
    TheTracker Posts: 1,223 Forumite
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    apollo9 wrote: »
    So, any recommendations for trackers? I am trying not to litter the forum with lots of different topics

    Visit Monevator and find the 'low cost index trackers' page.
  • dunstonh
    dunstonh Posts: 116,371 Forumite
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    buyhighselllow wrote: »
    Actively managed means you have to pay them a load more in fees. Track the market unless you can genuinely pick a star fund manager..and that is surely harder than picking a star stock !?

    It's not that difficult. When you filter out a lot of the dross, you are left with a much smaller list of funds to consider.

    I just rebalanced a portfolio of 10 funds. 6 managed and 4 trackers. 4 of the funds are bottom half. 6 are top half. The four in the bottom half is 2 managed and 2 tracker. 4 of the funds are top quartile. 3 managed and 1 tracker.

    You know you are not going to get 100% perfect on your selection on managed but you dont need to when you have a portfolio of funds. I estimate around 3/4s of the time the right managed fund is picked.

    To assume tracker is best or managed is best is far too simplistic.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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