Ask the Experts: FTSE All-Share Index funds?

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Question: FTSE All-Share Index funds look more attractive to me…..go on, tell me how the UK Equity Fund market can out perform!

Answers: Nick Kirrage - Schroders The first thing to note is that by buying an equity index tracker you will never outperform the index after taking away management fees. By buying an actively managed fund, despite fee's being higher, you at least have a chance to outperform the index after fees. Additionally, an index fund's returns are very exposed to the results of its largest constituents. It may be the case that these companies have become large as they are expensive (e.g. Vodafone in 2000) and irrespective of their size are a poor investment. So how to outperform the index...

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