to be used for any questions related to Index funds. The question should clearly state the Index in question [Nasdaq,LSE] or the fund house in question. If the question is generic with the intention to understand how the funds work, then a specific example should be quoted to get a better answer.

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16
votes
3answers
498 views

What differentiates index funds and ETFs?

Many companies offer index funds and ETFs. If two funds or ETFs track the same fund, what differentiates the two? Is it common for one index fund to outperform another? How can this happen if the ...
13
votes
5answers
377 views

Is there any benefit to investing in an index fund?

Does an index fund comprise of stocks that mimic the index? So when the index is altered to include new players/exclude old ones, the fund also adjusts? But how can this be, since index funds are not ...
11
votes
1answer
367 views

Will the popularity of index funds cause a pricing bubble in the stocks that make up an index?

I can't help but notice the popularity of index mutual funds over actively managed funds. I think all the arguments are sound, but I have one worry: Index funds are run by buying the stocks listed ...
10
votes
4answers
581 views

Is an index fund a good choice for a starter investment?

As an individual that is willing to consistently invest ~100-150 dollars monthly into an investment, willing to devote an average of an hour a day to educate himself / monitor investments, what kinds ...
10
votes
5answers
158 views

What to sell when your financial needs change, stocks or bonds?

Say I have a portfolio composed of 80% index funds, and 20% bonds. This portfolio was created under the assumption I would have a relatively large income, and wouldn't need to withdraw any funds for a ...
10
votes
6answers
291 views

Entering the stock market in a poor economy

I'm sitting on a reasonable pile of cash, earning negligible interest in a bank savings account. After determining that I can live without this money for 5-10 years, I decided it would be best put ...
10
votes
1answer
499 views

Index mutual fund “minimum initial investment” inside a Roth IRA?

When a fund says its minimum initial investment amount is $2500, does that mean I need $2500 in my Roth IRA account to trade that fund? If so, would I need $7500 total in my Roth IRA account to trade ...
10
votes
1answer
476 views

Understanding differences between S&P500 index-tracking ETFs

I'm trying to understand the difference between S&P 500 trackers. Example: SPY IVV VOO They all have different prices (IVV being $1 more, on average than SPY, and VOO being about 50% ...
9
votes
4answers
419 views

How should one structure a portfolio given the possibility that a Total Stock Market Index might decline and not recover for a long time?

It's a common financial advice to buy an index and hold it forever. Particularly, John Bogle endorsed buying an S&P 500 index and just hold it / buy more of it during bear markets so you get ...
9
votes
2answers
4k views

Where can I find open source portfolio management software?

I am looking for open source code that allows me to do something like Morningstar, but with full export facility, not partial like here, and only for low-cost index funds. I don't want to create a ...
8
votes
2answers
189 views

Assessing the value of an ETF

I recently read through Graham's The Intelligent Investor and am looking at what index ETFs or Index Mutual Funds it makes sense for me to invest in. As I was considering this I realized that, at ...
8
votes
1answer
488 views

First time investor wanting to invest in index funds especially Vanguard

I am a first time investor. I would like to invest small and gradually build up depending on how I fare in the stock market. I've been following the stock market for a couple of years and have read up ...
8
votes
2answers
246 views

Invest in low cost small cap index funds when saving towards retirement?

This is a question about "Personal investing and asset allocation". About me: I earn more than I spend I may retire in 15 or 20 years, and I have savings to be invested in something or managed ...
8
votes
2answers
326 views

Growth of unrealized gains in tax-managed index funds

Tax-managed index funds defer capital-gains distributions by, among other things, offsetting capital gains with losses and deviating from their underlying indexes to avoid having to sell appreciated ...
7
votes
7answers
677 views

Is Bogleheadism (index fund investing) dead?

I've always been a believer in index funds, and lately have been reading books such as The Coffee House Investor and The Lazy Person's Guide to Investing. It all makes sense to me except that the ...
7
votes
5answers
493 views

What should I do with my $25k to invest as a 20 years old?

I have been fortunate enough to learn the skills necessary for a decent paying job at a fairly young age in computer engineering. I have $25k in my checking account, and I need a sensible means of ...
7
votes
2answers
251 views

Are there index tracking funds that avoid the “buy high - sell low” problem?

An index tracking fund is a fund that buys direct stocks with a view to directly matching a particular index (e.g. the S&P500 or Russell 2000). One way to allocate assets in such a fund is to ...
7
votes
1answer
315 views

How can one relatively easily show that low expense ratio funds outperform high expense ratio funds?

Almost everybody these days says that passively managed, low expense ratio funds outperform actively managed, high expense ratio funds. I believe it, and have been investing accordingly, but I would ...
7
votes
6answers
503 views

Are stock index fund likely to keep being a reliable long-term investment option?

As I understand it, stocked-based index fund have been a reliable long term investment option in the last X years. Specifically, during "most" 10-year intervals in the examined history, the yield on ...
7
votes
3answers
182 views

I am a 23 yr old looking to open a Roth IRA. Should the fund I choose track the S&P?

Not sure what particular funds should be examined, including funds that track the S&P. Is it smart for me at a young age to choose a fund tracking the S&P?
7
votes
3answers
653 views

Is there a widely recognized bond index?

S&P 500 is a widely recognized stock index, that many people benchmark performance against, and you can find 'passive management' funds that compete to replicate it at as low a fee as possible. ...
7
votes
1answer
149 views

Why are index funds called index funds?

Why are index funds called index funds?
7
votes
5answers
390 views

More money towards down payment versus long-term investments

Background: I am married with no kids (but anticipating them at some point) and no debt at all. My spouse and I have an emergency fund, both fully fund our retirement accounts, and are also keenly ...
6
votes
2answers
105 views

What is the role of a manager in a passively managed index fund?

For example, what do the portfolio managers for the TD Canadian Index Fund (TD Asset Management) actually do? There should not be any need for portfolio managers, because no trading is involved. ...
6
votes
3answers
491 views

Where are Bogleheadian World ETFs or Index funds?

The term bogleheadian is a bit ambiguous term but its simplification means low-cost, diversified, tax-efficient -- solutions. The slant is ETFs or index funds. William Bernstein wrote in some of his ...
6
votes
1answer
350 views

How do euro hedged index funds work?

I was trying to find a S&P 500 tracking fund and came across this one. db x-trackers S&P 500 Euro Hedged Index UCITS ETF. Can anyone explain what the Euro hedging means and how it is supposed ...
6
votes
3answers
224 views

How do I calculate the current risk involved with US Bond Index Funds?

For months I have been trying to wrap my head around the concept of risk involved with the US Bond Index Funds in my portfolio. My initial conclusion is that the risk of long-term damage to my ...
6
votes
7answers
757 views

Are there any Social Responsibility Index funds or ETFs?

Are there any Index Funds or ETFs that focus on Socially Responsible Investing, or will I have to choose my own basket of stocks?
6
votes
2answers
284 views

Stocks vs. High-yield Bonds: Risk-Reward, Taxes?

Assuming one is looking for a fairly high-risk, high-reward investment, what are the advantages and disadvantages of a diversified stock portfolio (e.g. an S&P 500 index fund) vs. a diversifed ...
6
votes
1answer
161 views

Mutual fund net expense ratio greater than gross expense ratio

I'm looking at some funds to invest my 401k into. I noticed that a couple appeared to have a higher "Net Operating Expense Ratio" (0.56%) than the "Total Operating Expense Ratio" (0.50%). If it ...
5
votes
2answers
182 views

Analysis of Valuation-Informed Indexing?

My question. I've been reading about Valuation-Informed Indexing (VII). What is your reaction? Would you recommend this strategy? What are its potential strengths/weaknesses? Background. For those ...
5
votes
3answers
91 views

Do you micro-manage index fund purchases to a particular day of the month?

I have setup automatic withdrawal with my brokerage to purchase shares of an S&P500 Index fund the 8th of every month. When I first caught wind of the USA credit downgrade Saturday morning, I ...
4
votes
4answers
212 views

Why are typical 401(k) plan fund choices so awful?

I don't expect a huge number of funds to choose from in a 401k plan, but all the plans I've ever seen are loaded with funds that have outrageously high management expense ratios (MERs) and they ...
4
votes
3answers
2k views

What is the easiest way to back-test index funds and ETFs?

Some authors are irritating such as Stein, more here, they keep throwing people all kind of new "investing" strategies and different ideas after their last ideas stopped working. I feel such authors ...
4
votes
1answer
2k views

Where can I find historic performance data on Barclays Aggregate Canadian Bond Index?

I'm looking at the Vanguard Canadian Aggregate Bond Index ETF (VAB), and it says it replicates the "Barclays Capital Global Aggregate Canadian Float Adjusted Bond Index". Unfortunately VAB is less ...
4
votes
1answer
87 views

Foreign tax credit carryover w/o having filed previously?

I owned VGTSX for years now but only in year 2011 was it a requirement for me to file taxes. Can I claim foreign tax credit carryovers for past years even though I didn't file taxes during those ...
4
votes
0answers
270 views

Where can I find P/E and CAPE data for different sectors, countries and market capitalizations

I've been searching for high-quality data on CAPEs (cyclically adjusted price to earnings ratios) for different sectors, countries and market capitalizations. Shiller's Irrational Exuberance website ...
3
votes
2answers
239 views

Why are taxes on actively managed funds higher than those on index funds?

On this page I've found the following statement: Taxes on actively managed funds can be considerably higher than those on index funds. Why is that the case? Since both fund types consist of ...
3
votes
3answers
96 views

How is the index fund related to the underlying index?

An index fund tracks the underlying index. So if one invests 100 $ in an index fund tracking S&P 500, and the index grows 8 % in a year, will the 100 $ grow to 108 $? If not, how can the investor ...
3
votes
1answer
33 views

How are mutual/index fund MERs fees charged?

Let's say I spend $1000 = 100 units at $10/unit on a no-commission, no-load index or mutual fund with an MER of 1%. Let's say any distributions are deposited as cash. In one year's time, the fund has ...
3
votes
2answers
330 views

Is a “total stock market” index fund diverse enough alone?

I'm just getting into investing (currently small amounts, to increase dramatically when I finish off my moderate interest student loans). From what I've read, index funds are the way to go, and I like ...
3
votes
1answer
204 views

Investment Portfolio Setup for beginner

I am new to investing but want to start soon, after being able to save some money and doing some research for the past few days. Here are some basic info about myself and my goals: Mid twenties ...
3
votes
2answers
707 views

What are short-term fairly liquid investments with attractive yields?

I am looking for fixed-income investments or investment strategy that offer quarterly liquidity and attractive annual effective yields and low risk (i.e. holding the security for a a quarter should ...
3
votes
3answers
154 views

How can a U.K.-based investor easily buy stock index fund shares?

Totally basic question, but I'm clueless :(. How do I buy stocks (I'm based in UK)? I want to buy shares of index funds. Vanguard in the U.K. offers following options: Invest directly - minimum ...
3
votes
1answer
65 views

What's a cost effective way to invest in foreign stocks/funds in Israel?

I would like to diversify, and not have all my investments tied to the NIS, and so I would like to purchase some foreign index funds. I just checked with my bank, and if I understood them correctly, ...
2
votes
1answer
116 views

What are stock indexed funds and how do they lower taxes?

I have read the Wikipedia page but I still don't get the concept. Who maintains the "index of a specific financial market"? For example, one index fund could invest in companies in the S&P 500, ...
2
votes
4answers
391 views

When are equal-weighted index funds / ETFs preferable to market-cap-weighted funds?

Many stock index funds and ETFs are traditionally offered as market-capitalization weighted, because the constituent indexes are composed like that. I understand the capitalization weighting reduces ...
2
votes
2answers
166 views

Mutual Funds Definition and Role

So mutual funds are funds which have exposure to a variety of assets to reduce the risk. But there are mutual fund companies (like BlackRock) in which people can invest into, and they determine a ...
2
votes
1answer
231 views

Is there such a thing as “over diversification”?

I went to an investment advisor today, and asked him his opinion about splitting my foreign (non NIS/Israei) investments between VTI and VEU. He said that he thinks it's "too diversified", and ...
2
votes
2answers
88 views

Who determines, and how, the composition of the S&P 500 index?

I thought S&P 500 would contain the top 500 U.S. companies by market cap, but apparently that is not the case? e.g., Facebook (FB) was only recently added and has market cap of $100B whereas ...