All-Share shuffle to affect tracker and ETF funds

All-Share shuffle to affect tracker and ETF funds

Investors in tracker and exchange-traded funds following the FTSE All Share reshuffle will find themselves with larger holdings in housebuilding and new companies, David Jones has said.

Summarising the latest FTSE UK index changes, the manager of the Aberdeen UK Tracker Trust said the FTSE All-Share reshuffle “reflected the effect of the surprise general election result in May.”

He added: “Investors can see house builders firmly in the ascendancy, and utilities and government outsourcing groups getting a reprieve.

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“Equally, many of the new IPOs continue to go from strength from strength on the back of improving consumer spending trends. However, even the recent recovery in the oil price was unlikely to save companies from the beleaguered commodities sector, several of which are faced with demotion.”

The FTSE UK index series announced its rebalanced indices on 3 June, with the changes becoming effective at the close on 19 June.

Adviser view

Chris Williams, founder of Bristol-based Wealth Horizon, said it was important to avoid market sentiment, whether it came to investing in the market or in new products designed to capture a current trend.

He said: “It is important that people have greater access to invest. That goes without saying. But it needs to be better thought out.

“Investment firms are currently just looking for the simplest way to capture a market at the expense of the investor – it’s a lazy and dumbed down approach to offering an investment service.”