Motley Fool: Intelligent Trackers
September 26th, 2006 | POSTED BY ROB
At The Motley Fool we’ve been fans of tracker funds since our site was launched nine years ago. We’ve always liked their low charges and simplicity. If GlaxoSmithKline (LSE: GSK) comprises 7% of the FTSE 100 (”Footsie”) by value, then a Footsie tracker fund will put 7% of its funds into Glaxo.
The only problem with this approach is that stock markets aren’t always efficient. Sometimes, investors become gripped by a new fashion, or even a mania, and pay far too high a price for shares in popular companies….
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