An investor’s life on Mars

A Martian called Zog visits Earth to see what it can offer in the way of the latest investment funds. He meets an independent financial adviser called Charlie who asks him what kind of investment he’s looking for.

‘I’ve been reading about funds of funds,’ says Zog. ‘They sound good. You get access to a range of managers, each of whom invests in a different style. So if some of them aren’t performing well at any time, the others might be. Overall, you increase your chances of making money. And by spreading your money across several funds, you reduce the risk of losing all your money if something goes wrong with one particular fund.’

‘I don’t like funds of funds at all,’ Charlie snorts. ‘Too expensive. What you want is a tracker fund. They’re brilliant — particularly because they’re cheap, probably the lowest fees of all the funds you can buy. A tracker fund buys all the stocks in a stockmarket index, in the right proportions.