Index tracking not the answer

Over the past few years, trackers have made inroads into the investment management community, so much so that index tracking now accounts for some 30% of the UK and 35% of the US markets. This is perhaps not so surprising with hindsight, given the fact the world has enjoyed a 20-year bull market. Over this time, making a passive decision to invest in the index has meant a good percentage gain. During the late 1990s, the tracking industry, epitomised by Virgin, was highly successful in using past performance statistics to prove to the investing public that putting money in trackers was...