A Tracker Fund, also known as an index fund or exchange-traded fund (ETF), is a type of investment fund that aims to replicate the performance of a specific stock market index, such as the S&P 500 or the FTSE 100. These funds are designed to track the performance of the index by holding a portfolio of securities that closely match the composition and weighting of the index.Tracker funds are typically passive investment vehicles, meaning that they do not try to outperform the market by actively picking individual stocks or making market predictions. Instead, they simply try to match the performance of the index they are tracking. This makes them a low-cost alternative to actively managed funds, which require a fund manager to make investment decisions and may have higher fees.Tracker funds can be bought and sold on stock exchanges, like individual stocks, and are available to retail investors as well as institutional investors. They are considered a simple and low-cost way to gain exposure to a broad market or a specific sector, and they can be used as part of a diversified investment portfolio.It's important to note that while tracker funds aim to replicate the performance of an index, there can be a difference between the return of the index and the return of the tracker fund, due to the expense ratio, bid-ask spread and other factors.
