01 Strategy & Academic Basis
The Tracker Fund operationalises William Sharpe's CAPM insight: in an efficient market, the optimal risky portfolio is the market portfolio itself. Attempts to outperform through active stock selection or market timing are, on average, a negative-sum game after costs. The fund therefore seeks to replicate the global equity market cap-weighted index at minimal cost.
Empirical support is extensive. Sharpe's 1991 paper The Arithmetic of Active Management demonstrates that as a matter of arithmetic, the average active manager must underperform the passive benchmark by the amount of fees charged. Accordingly, the Tracker fund minimises tracking error and maintains an all-in cost below 15 basis points.
02 Investment Pillars
03 Simulated Performance
04 Asset Allocation
05 Holdings
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06 Macro Positioning & Investment Thesis
The case for low-cost passive investing strengthens, not weakens, in a difficult macro environment — but the modern market-cap index now embeds a concentration risk that every passive investor must understand. This fund's job is to deliver the market return at minimum cost, while being transparent that "the market" today is an increasingly large bet on a handful of AI mega-caps.
Why Passive Wins Cost compounds against active
Sharpe's arithmetic of active management (1991) is unforgiving: in aggregate, active investors must underperform the index by their costs. In a higher-volatility, headline-driven regime, the temptation to trade rises and so do the costs of being wrong — making the 0.12% all-in fee and full-replication discipline more valuable, not less. The fund does not try to time the Hormuz shock or the AI cycle; it captures the long-run equity premium that, across decades, has rewarded patience over prediction.
The Hidden Active Bet Concentration is the real risk
Honesty requires flagging the key risk: a market-cap-weighted global index is now heavily concentrated in a small number of very large technology companies tied to the AI build-out. "Passive" therefore carries an implicit, sizeable active position on AI mega-caps — and on the same energy-cost and capex risks that could de-rate them. The fund accepts this as the price of true market exposure rather than introducing tracking error, but investors should size their allocation knowing that the index is less diversified than its name suggests.