Index tracker funds

An index tracker fund involves a fund manager trying to replicate the performance of a given stock market index by purchasing shares that make up the content of that market index in the relevant proportions to match the performance of the stock market index the fund manager is trying to replicate.

It is only in the last ten years or so that index tracker funds have been available to smaller private investors and as a result their popularity has risen. By following the performance of the index itself rather than trying to actually beat it fund managers believe they will see a steady rate of term that outperforms any potential short term gains from investing in specific companies.

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