What is the primary goal of Tracker Funds?

Tracker Funds are specifically designed to replicate the performance of a specific index. The primary goal of these funds is to achieve returns that closely match the performance of the index they are tracking, such as the S&P 500 or FTSE 100. They do this by investing in the same securities that make up the index in the same proportions. This strategy minimizes management costs and makes it an attractive option for investors seeking to match market returns without the complexities of active fund management.

The other options, while related to investment strategies, do not align with the fundamental purpose of Tracker Funds. For example, diversifying investments across various sectors may be a characteristic of some funds, but it is not the specific goal of Tracker Funds. Similarly, while generating higher returns than mutual funds could be an objective for some investment strategies, Tracker Funds aim to perform consistently with a specific index rather than outperform it. Lastly, providing market predictions is not the focus of Tracker Funds; instead, their purpose is to follow and replicate the index’s movements, leaving predictive strategies to other types of funds or analyses.