So-called ‘tracker’ or ‘passive’ funds have become very much more sophisticated in recent years, largely facilitated by technology. The originals, you may remember the Virgin UK Index Tracker, launched nearly 30 years ago, mimicked the FTSE index and, as they don’t need anyone to manage them, were and are very much cheaper than ‘active’ funds. The latter have fund managers trying to beat the index and the problem is, only a minority ever do, more often than not by going out on a limb and taking some risks. There are now hundreds of different trackers, including and excluding different types of shares and bonds in markets all over the world. In the view of many, including us, they do what most of our clients want us to do, or what we want to do for most of our clients: provide a spread of risk and do better, over the longer term, than they could in the bank. And bring down the cost of investing.
“FTSE 100 skyrockets and pound rallies as markets react to Labour Party’s landslide victory”
‘Won’t the markets crash if Labour wins? Should we move everything to cash just in case?’ Well, no, apparently not. In fact what markets hate is uncertainty.
