It's not what I imagined it would be when I first heard about it.
For say the ASX200 I thought the fund would be directly invested in those top 200 companies and as new funds came and left in they would be evenly distributed in and out of those 200 companies. Which appealed as a way to safely trade an index with a large amount and not have to pay someone to 'manage' those funds spread out all over the place using the pie charts they love.
When I spoke to Vanguard I asked if their fund would rise and fall exactly the same % as the index and was told yes and that it would also pay the dividends every 3 months, which reinforced my impression above. However, listening to you guys it sounds different, more complicated and with risk that direct investment in those companies wouldn't carry.
Perhaps it would be easier to simply forget the index and simply chuck it all into BHP which is virtually an index in its own right?
