Simon Ellis, managing director of Legal & General Investments, explains why index funds should not be viewed as the poorer relation of their active cousins and why investors are no longer using them to just tap into developed market growth.
Index funds have traditionally been seen as a useful and low-cost means of accessing growth in developed equity markets, the view being that these markets are relatively efficient and therefore more challenging for fund managers to outperform; to this day the majority of index funds in the UK track either the FTSE100 or FTSE-All Share Indices. But things are changing fast. Investors have had a turbulent time over the past few years in almost all markets. The lack of clarity in market direction and accompanying high levels of volatility have left them questioning the value they are get...
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