Exchange traded funds are a fairly new arrival on the investment scene, offering investors and advisers the chance to achieve consistent benchmark performance while keeping costs to a minimum.
Index funds are now a mainstream investment approach, their cost-efficient, risk-controlled nature making them an ideal building block for many an investor's portfolio. The arguments in favour of tracker funds are well known: they offer well-diversified exposure to equity markets and avoid stock-specific risk; low portfolio turnover and the absence of highly paid star fund managers keep costs to a minimum; and consistent benchmark performance, as it represents an average, means better performance than the average active manager. However, the debate has gone far beyond the issue of pu...
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