Tracker Funds

Question 1

Full Replication

Answer 1

Hold each constituent of the index in accordance with its index
weighting.

Question 2

Stratified Sampling

Answer 2

Hold a representative sample of shares from each sector in
the index.

Question 3

Optimization

Answer 3

Use of computer modelling techniques / algorithms to achieve the desired outcome.

Question 4

Synthetic

Answer 4

Use derivatives such as swaps with a market counterparty (ie. an
investment bank) to achieve the desired outcome.