Questions tagged [index-fund]

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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2answers
43 views

Index fund question regarding Vanguard 500 Index Fund Admiral Shares - compound interest

I created an account with TDAmeritrade and started investing in VFIAX(Vanguard 500 Index Fund Admiral Shares) three years ago. At the time, I thought that I am investing in an index fund. However I ...
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1answer
66 views

What is the difference between investing in index fund on their website over your existing bank?

I want to start investing in index fund S&P500, specifically VFIAX from Vanguard. I went to their website and started creating an account, and then it occurred to me....maybe my bank, Chase ...
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4answers
227 views

If everyone expects index funds to increase in value in the future, wouldn't future returns be zero? [duplicate]

Suppose everyone expects Apple to increase its earnings by 20% next year. Due to the general expectation, the current stock price will incorporate this information. For example, if subsequently Apple ...
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10answers
8k views

Why do people claim that it's hard to outperform the S&P 500? It has only increased in value by ~1.5x in the past 5 years

Whereas companies like Google, Facebook, Netflix, Amazon, Apple have all increased anywhere from 3x-6x in value in the past 5 years. If you just stuck with those companies, you would have easily ...
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3answers
55 views

Changing funds in Roth IRA - Tax implications?

I have the following funds in a Roth IRA in a Fidelity account, and am determining if it is worth switching funds for a few of them. I mainly picked these because they have low expense ratios. I'm in ...
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1answer
48 views

Is there a criterion for the different % allocation values in ETF or funds diversified portfolios?

This question does a good job covering the basics of asset allocation. My question concerns the asset allocation of stocks, so we leave the bonds out of the question. All the recommended portfolios ...
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1answer
117 views

What are the pros & cons of investing in multiple funds?

I invest in a large 'ethical' fund, that manages around £1b of investments. Now, I make a small monthly contribution to this fund via a Stocks & Shares ISA. Obviously a fund is already spread ...
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2answers
106 views

How can I make most of the profit earned from ETF which I invest every month?

I've been regularly investing in a ETF every month for an year, for the same amount. Now that the fund is at it's peak, I'm not sure what should I do, stay invested for long term or sell it and re-...
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1answer
116 views

Questions on Index fund dividends

I wanted to ask a few questions regarding Index funds and its dividends. The questions are the following: If I decided to invest 10k into an Index fund and contribute monthly around 100-200 and ...
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2answers
158 views

For a risk-averse investor, is it ever justifiable to invest in real estate over an index fund?

Let's say I have a chunk of cash sufficient to cover a 50% down payment on an average house (£600k). Or, buy an inexpensive house outright. Let's also say I must use the money for real estate—I cannot ...
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1answer
183 views

Understanding how an ETF works

I am trying to fully understand how an ETF works. For the sake of simplicity, let us restrict ourselves to physical replica ETFs. Let us suppose that an ETF follows an index which tracks three stocks:...
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28 views

How a Gross Total Return ETF or Net Total Return ETF can be marked DIST

From the definition I've found about net and Gross Total Return indexes: A Net Return Index includes reinvesting dividends after withholding tax A Gross Return Index includes reinvesting dividends ...
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51 views

How can I obtain country weights for the MSCI world?

I would like to build a portfolio from MSCI (or other index suppliers') market capitalization indices using ETFs. The portfolio should follow the relative size of the gross domestic product as closely ...
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2answers
1k views

Income vs growth securities in a downturn

It's generally accepted that "income (dividends) and growth (capital gains) are perfect substitutes (tax and transaction costs aside)". i.e. "In financial theory, there is no reason for a difference ...
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2answers
133 views

Price discovery and index funds bubble

I have read an article and watched a couple of videos about a possible index fund bubble. One of the arguments to justify this bubble is (if I have understood it correctly) that a very huge ...
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2answers
159 views

What would happen if an hypothetical index funds bubble crashes

There are some finance professionals that have warned about an index fund bubble: Index funds bubble I'm assuming that, at some point, index funds will get into a bubble and this bubble will ...
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63 views

Can I convert shares in an index ETF into shares of the index constituents?

Suppose I own many shares of the SPDR Dow Jones Industrial Average ETF Trust (NYSE Arca: DIA). How can I convert those shares in DIA into shares of the 30 components of the DJIA?
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101 views

What's the difference between mutual fund, index fund, etf, index mutual etf, etc.?

Originally, this was more of a conceptual question that I tried to Google, but after looking through many sources, I keep seeing different definitions and terminologies and a combination of them that ...
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How to compare return of an ETF with the index it tracks in Morningstar?

In Morning start you can compare stock indices and ETFs, but I haven't found a way to compare an ETF/Index fund with the index it tracks, in order to see how accurate is the ETF/Index fund is. How ...
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3answers
242 views

How Index Funds Raise Money to buy new stocks?

In general, after IPO, the transactions happening on the shares will be between buyer and seller and they won't go to the Organization. And after that companies rely on their earnings, debts and ...
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1answer
116 views

Is it really 0.09% fee that SPY ETF is charging? Over the long term, doesn't SPY mirrors the S&P 500 index?

So the ETF can charge 0.09% as fees, but is it taken away from your account, such as from your 401K account or personal investment account, or is it taken from the ETF Trust itself? If it is taken ...
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77 views

With a 401k, can I sign up first, and then switch to different investment types and buy/sell them later?

For example, our company's 401K has an easy choice of "BlackRock US index fund" (for Dow Jones 30 DJI) using Fidelity, and does not require opening a broker account. Should I just start using the ...
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2answers
65 views

Value of Index Funds Related to Dollar Creation

I read this article this morning. While I believe the United State economy will remain strong, it did introduce a question for me. In the off-chance that hyper-inflation (or extreme deflation) happens,...
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113 views

Advice: Diversify my retirement investments with a Roth IRA

I am new to investing, and also late to the game (34 yrs old), so I'm trying to make the most financially intelligent decisions I can. I'm starting a Roth IRA at the moment, and funding it with this ...
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0answers
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What are the major advantages of actively managed mutual funds over index funds? [duplicate]

This article from The Motley Fool provides insight on the average performance of actively managed mutual funds from ~5 years ago: Growth fund managers fared even worse, with just 6% of growth funds ...
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Is there non taxable investment account (like UK ISA) equivalent in Switzerland? How does one make tax-efficient Swiss investments?

While we were living in the UK, we were using our extra money to invest in index funds via ISA accounts. On these specific accounts, you do not pay Captial Gain Tax and they are excellent for long ...
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3answers
2k views

Should I transition to index funds now, or wait?

When I started investing, I made the mistake of trying to pick individual stocks and actively managed funds. I now believe that low-cost, passive total market index funds are the best strategy for me ...
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4answers
274 views

How Should I invest $20K? [closed]

I came by some cash a year ago, so I put $20,000 in a Certificate of Deposit which will end this weekend (at about $20.5K). Now I'm wondering what to do with it. I don't really know much about ...
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1answer
79 views

Is there a way to add money to my Roth IRA index fund ONLY if they can buy it at or below a certain price?

Is there a way to add money to my Roth IRA index fund ONLY if they can buy it at or below a certain price? Specifically Vanguard VTSAX since I already have met the minimum requirement (I don't have ...
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2answers
141 views

How to find index funds that contain specific stock?

Is there a process that would let you look for index funds that contain specific stock. Like, find index funds that contain Alphabet NASDAQ: GOOGL. I know how to do it manually - you just go to ...
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95 views

If I buy index funds that are measured in foreign currency, am I not speculating?

I live in Germany and have invested into the S&P500 over the last couple years. Just now for some reason I am wondering if I am not speculating over the exchange ratio of euros and dollars. My ...
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1answer
234 views

What exactly does an ETF do when a company is added or removed from an index?

Suppose an index is changed in so far as Company A is removed and Company B is added. Are these changes reflected immediately in an ETF reflecting said index? I suppose that when an AP creates ETF "...
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119 views

What would happen to my investment in a fund if the managing bank collapsed?

Based on advice in a book I've been reading (Investing Demystified), I've put a lot of my money in an 'all world' index fund, managed by HSBC. This is based on the premise that an all world fund is ...
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1answer
57 views

Currency risk with a good index, or bad index with no currency risk

I understand that usually is not a good idea to allocate the majority of your assets in international investments due to currency risk. Still, when I look at the Euro Stoxx 50 it seems that it's far ...
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1answer
353 views

Vanguard S&P500 vs Vanguard U.S. Equity Index Fund

I was looking at Vanguard funds and ETF's and I can't figure out why performance(compound average return 2012-2019) of U.S. Equity Index Fund - Accumulation is better than S&P 500 UCITS ETF (VUSA)....
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2answers
151 views

Are index fund expense ratios “priced in”?

I'm coming from a Robinhood "day trading" mentality, so I'm used to public advantages being "priced in", more or less. It seems like many people pick index funds based on their expense ratio. I would ...
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1answer
212 views

Consequences with liquidity issues for an index fund or ETF?

In the media in recent months, there were mentions of liquidity risk of index funds and ETFs (sparked by some statements by Michael Burry). My question is if there is a mass sell off by the public of ...
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1answer
104 views

Index fund's assets actual owner

Let's suppose you buy a index fund issued by some financial firm. In that case, who is the actual owner of the fund's underlying shares, you or the financial firm? In case of the answer to the above ...
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2answers
79 views

Why does CAD-hedged S&P 500 ETF suddenly not track to actual index

At the time of posting this question, the BlackRock ETF XSP is down approximately 1.3% during the period Dec 24 9:30 am - Dec 31 10:30 am, while the actual index is down approximately 0.3% during the ...
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1answer
130 views

How to interpret returns on index funds

I don't quite understand how investing into index funds works, or how to interpret the average historical returns. Let's say that, 10 years ago, I decided to invest $30,000 dollars at the end of each ...
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0answers
154 views

How might ETFs accelerate a “crash” [closed]

I am editing my question to pose the inquiries first in order to hopefully emphasize their objective, rather than subjective nature upfront. Here is my question: Am I correctly understanding the ...
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1answer
54 views

What is this apparent discrepancy between MorningStar and MSCI

I've been trying to work out what roughly what the performance of a global equity index fund has been over the last 10 years. Looking on Morningstar I noticed that they have a benchmark index for ...
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1answer
388 views

How can you know which index is tracked by a specific index fund?

Looking at this Vanguard UK index fund (short-term investment grade bonds). It says: The Fund seeks to provide returns consistent with the performance of the index,[...] How can I know which ...
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2answers
107 views

Clarification about ETFs and Index Funds with regards to sell operations [duplicate]

I'm trying to understand the difference ETFs and index funds in terms of selling them (if you want to get rid off them quickly for any reason). As far as I understand, if you want to sell an index ...
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2answers
256 views

Safety about investing through a broker like Degiro

I'm really new to investing. I don't believe in pension and support from the government that much, so I took things in my own hands. I started off from this blogpost and landed on JL Collins' blog ...
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186 views

Does it make more sense to purchase VTI or VUN?

I live in Canada. VTI and VUN are both US total market index funds through Vanguard. VTI is the American version, VUN is the Canadian version. VTI has an MER of 0.04% but the dividends are subject to ...
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4answers
370 views

Will Future Recessions be Prevented by the Large Amount of Passive Index Funds and ETFs?

According to this article from CNBC: Passive investing, made up of funds tracking market barometers, has now taken over nearly half the stock market as more investors shun stock-pickers and flock ...
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1answer
44 views

How can I know the true growth rate of index funds over a given interval? [closed]

There are many quotes flying around on the internet about the profitability of index funds. But is there a tool that would allow me to select an index fund, a purchase date and a sale date to ...
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3answers
111 views

During a day, when does a mutual fund buys (or sell) the underlying stocks?

An index mutual fund holds shares weighted by the components in the underlying index. Suppose one day, the fund has to net buy $1 million worth of shares (current owners request the sale of $2 ...
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3answers
2k views

Should I invest in the US or India markets?

If I had $1000 to invest, am I better off investing it in the US, in India, or a mix of the two? I am an Indian citizen working in the US, with the option of investing in US index funds or sending ...

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