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Tracker funds

21 March 2007

Tracker funds are passively managed, which means there is no manager making investment decisions. The investment portfolio uses a computer to mirror the chosen index and does not need daily intervention.

This makes tracker funds very efficient to run, which means that charges can be kept low. The downside is that they are less likely to provide as high a level of growth as actively managed funds where skilled fund managers invest on the basis of relevant market information on a daily basis.

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