8

Big theme investing and index funds

The enthusiasm surrounding the development of index tracking funds should not blind us to the fact they are not an end in themselves – they are simply tools, cheap, efficient tools nevertheless, that aid us in building better portfolios.

The huge choice of index funds does provide us with one unique advantage, however – pretty much every big idea or theme that is prevalent in investment can be accessed by investing in some sort of index tracker, be it an ETF, an ETC or a structured product with a tracker in-built.

We should, rightly, be concerned with how index funds are constructed and why they might be a better structure, but a detailed examination of index funds should not ignore much more important ...

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