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….