Are tracker funds an attractive diversified alternative to their actively managed peers? Or will the potential of actively managed funds to outperform the benchmark by a large margin always be preferable?
Debate over whether index funds offer a better long-term investment proposition than their actively managed peers has been raging for a long time. Tracker fund supporters argue that low charges plus the removal of stock selection risk make index funds an attractive, diversified alternative to active funds. In addition, historical figures show index funds generally outpace the average fund in their sector over various time periods when charges are taken into account. Active fund fans meanwhile point out that when active managers do their job well, the potential to out perform an index or...
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