Trackers make poor investments, expert claims

Thu, 04 Sep 2008

Investment funds which track share indexes are offering poor rates of return, according to one expert.

Tony Ahearne, spokesperson for data analyst Moneyspider.com, explained that although such investments performed steadily when markets were doing well, the recent downturn has hit them hard.

He said: "In this investment climate a tracker can only go one way, and that is down.

"There is little point paying low charges when you are being rewarded with below par performance."

For this reason, consumers should be better off paying a large fee for a managed fund which is more likely to offer a return on their investment, he added.

Good fund managers should be able to position an investment fund so it is still able to turn a profit despite the wider down turn, Mr Ahearne stated.

Yesterday, Hak Salih, manager of the Santander Equity Income Unit Trust, claimed that so-called 'large cap' firms are the best choice for people looking to make UK-based investments.
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