Tracker Funds

Otherwise known as Index Tracker Funds or Passive Funds, these are Investment Funds that are designed to mimic or follow the movement of a stock market index such as the FTSE 100 index of leading shares in the UK. The charges on these funds are generally lower than for Active Funds and in rising markets they can tend to outperform the ‘average'. In falling markets however they will tend to do less well because they passively follow the index they are tracking. There is no right or wrong answer to the argument of passive versus active and sensibly a portfolio should contain an element of each.

In an investment and financial planning context, funds are generally ‘collective investments'. That is to say that an individual's money is ‘pooled' with those of many other investors to invest across a wide range of shares or other investment media thus giving a spread of risk that would normally be unobtainable to one individual.

Examples of commonly used funds in the UK would be Unit Trusts; Open-Ended Investment Companies (OEICS); Investment Trusts, Life Funds and Pension Funds.

 

MI Wealth Management is a trading style of MI Financial Planning Ltd.   Registered in England No. 07096855.   Registered Office: The Long Barn, Paxcroft Courtyard, Trowbridge, Wiltshire, BA14 6JB.
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