Sounds like you've got a sensible attitude, Eko. As Jack Bogle...

Sounds like you've got a sensible attitude, Eko. As Jack Bogle (founder of the Vanguard Group) says, index funds must always win in the long term because of the "relentless rules of humble arithmetic". I can recommend his book, "The Little Book of Common Sense Investing" or indeed any of his other books. (They all say the same thing.)

I can also suggest you have a look at some top-notch Australian listed investment companies, including my personal favourites: ARG, AUI, CHO and MLT. These not only have considerably lower fees than unlisted managed funds, but in fact are cheaper than even STW - and they have spectacular long-term track records.

To answer your question about pricing on STW: essentially this takes place in two ways. First, the market forces of supply and demand determine the price at which STW shares trade (just like any other shares). And second, institutional shareholders can redeem "creation units" (currently worth about $3.3m each) for a basket of the shares they represents (i.e. shareholdings in each of the 200 companies held in STW's portfolio, weighted according to their market cap). I believe that instos that own the shares in this basket of stocks can also swap these stocks for creation units: by these mechanisms, they can theoretically take advantage of any pricing discrepancy between STW and the shares in the ASX200.

Note however that STW's share price is not simply the level of the ASX200 divided by 100.