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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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Options to invest after maxing IRA

My company offers a Simple IRA where they match 3% to what I put. I can only put in a max of $16,000 per year. The good problem that I have now, is that I have way much more money still left even ...
Mars Sojourner's user avatar
0 votes
1 answer
281 views

Is it better, financially, to invest in a property or in ETFs?

I need a bit of a help deciding if it's better to invest in a property or ETFs. I have currently saved up a decent sum of money and I'm looking to invest it wisely. I'm 27, if that matters. Option 1: ...
LocustHorde's user avatar
6 votes
3 answers
2k views

Can one get a liquidity premium as a retail investor?

Is it possible to get a liquidity premium as a retail investor? That is, between the following two options, I would expect there to be a theoretical extra return to doing (2): Hold an index fund for ...
Geoffrey Irving's user avatar
2 votes
3 answers
632 views

Contributing over the 401(k) limit vs investing in an index fund?

I find myself in a lucky position. I have a stable, high-paying job that allows me to achieve nearly all my financial goals, including: Maxing out the yearly contributions to my 401(k), including ...
Tyrian's user avatar
  • 21
-4 votes
1 answer
232 views

Why waste money buying index funds when you can can buy all the stocks on index on your own?

I've got a question. As we know that index funds puts money on all the stocks of a particular index(say Dow index) - on all 30 stocks present in the Dow index. My question is if I have enough capital ...
CREATIVITY Unleashed's user avatar
3 votes
2 answers
105 views

Which of my tax-advantaged accounts should I hold my bond market index funds in?

I have traditional, Roth and SIMPLE IRAs. I'd like to get some total bond market index funds (VBTLX). In terms of taxes, gains, dividends, etc. is there any difference between holding the fund in a ...
pixelearth's user avatar
1 vote
2 answers
182 views

index rebalancing question

When the S&P 500 adds or removes companies, my intuition is that the companies added have a higher market cap than the companies removed. To what extent does this difference drive the growth of ...
Mike's user avatar
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8 votes
6 answers
6k views

Is investing in S&P 500 a wise choice if you plan to purchase a house in 10-15 years?

My total compensation is $168k/year ($285k gross) and my goal is to purchase a house in the range of $1M to $2M. I plan to invest my savings in the S&P500 for about 10-15 years, hopefully, to make ...
N N's user avatar
  • 111
2 votes
2 answers
207 views

Stock prices rise due to index (SP500) inclusion means I should not buy index funds?

When a stock rises (either temporarily or permanently) before its inclusion into an index, that means index funds need to be purchasing the stock at inflated prices. Doesn't that mean when you ...
JobHunter69's user avatar
2 votes
2 answers
183 views

How does mutual funds confiscate the stock dividends?

I'm reading The Little Book of Common Sense Investing by Bogle John, the founder of Vanguard index funds. In Chapter Six: Dividends Are the Investor’s (Best?) Friend: But Mutual Funds Confiscate Too ...
daisy's user avatar
  • 579
0 votes
2 answers
147 views

Understanding the weight of stocks in S&P 500 indexes

I'm reading about S&P 500 stock list here, https://www.slickcharts.com/sp500 It looks like each stock has a different weight, e.g MSFT has 7% but V has 1%, why is that? What's the problem of being ...
daisy's user avatar
  • 579
1 vote
1 answer
256 views

Question to do with ETF price changes during the day

In my learnings I was told the nav price of an etf is calculated at the end of the trading day,So the next day trading resumes at that price but then fluctuates due to supply and demand for the etf ...
j jose's user avatar
  • 39
-2 votes
1 answer
105 views

Cheap indices in Europe

I have currently started investing and have access to the following markets: Xetra, BCPP, RMS I see many good indices like the DAX, but I have no more than 500eur allocated. I saw that there are ETFs ...
Adam Labuš's user avatar
0 votes
2 answers
175 views

What kind of investment strategies are typically employed when investing at the industry level?

I know economic sectors such as industries represented by SIC codes or GiCS codes are often covered in depth by analysts and some specialize at the industry level rather than stock level. At least ...
user9875321__'s user avatar
0 votes
1 answer
117 views

How does the definition of expense ratio and gross return fit into the net return on investment equation?

I am currently reading an investopedia article about expense ratios in funds. This article uses the following numerical example about expense ratios and returns. A fund has a gross return of 10% and ...
rarchim2's user avatar
2 votes
1 answer
655 views

Can ETFs be broken down into the stocks composing them without paying capital gains tax?

I own some bad index funds. I would like to decompose them into their stocks, and just hold these (maybe doing further alchemy and replacing some of them with other index funds). Is this possible ...
john goodheart's user avatar
0 votes
1 answer
89 views

How can an index fund experience price variations different than those of the index it tracks?

From 22/03/2022 to 24/03/2023, these are the S&P total market index and the Vanguard U.S. Equity Index Fund: S&P total market index: Price on 24/03/2022: $4619.20 Price on 24/03/2023: $3974....
Martel's user avatar
  • 1,281
-1 votes
1 answer
127 views

What's an Index Interest Strategy Charge Rate in a long-term care (LTC) insurance plan?

I'm looking at some Life Insurance Illustration (mirror) for the Long-term care (LTC) insurance plan "Nationwide Indexed UL Protector II 2020" managed by the Nationwide Life and Annuity ...
Franck Dernoncourt's user avatar
-1 votes
1 answer
156 views

What happens if an Index Fund sell off occurs?

For example, if you have a 3-fund portfolio of the Fidelity Total Market Index Fund, Fidelity International Index Fund, and the Fidelity Total Bond Fund, does this strategy represent "meta" ...
w21froster's user avatar
8 votes
3 answers
2k views

Are the S&P 500 and Dow Jones Industrial Average securities?

As I understand it these Indexes are baskets of assets that are securities. Does that make the Index itself a security? What about an index of commodities?
Origami's user avatar
  • 89
2 votes
1 answer
268 views

Can I buy index funds without margin and own it like a stock?

I am a total newbie so this might be a silly question but I am trying to buy S&P 500 and own it like a stock. The problem is that my broker (XTB) only has the option to buy it with margin and ...
hdw3's user avatar
  • 123
9 votes
1 answer
1k views

Why are there contradicting price diagrams for the same ETF?

I'm an absolute beginner to investing. I'm currently looking into the "iShares Core MSCI World UCITS" ETF tracking the MSCI World Index. The iShares Website shows how over the past 5 years ...
Jan Berndt's user avatar
1 vote
2 answers
130 views

What would be the instrument/index with the most historical data available for something similar to TLT aka a bonds fund? [closed]

I would like to have as much historical data as possible regarding a bonds fund performance similar to the iShares 20+ Year Treasury Bond ETF (TLT). For now I have this source but it goes back to only ...
Bruno's user avatar
  • 21
-2 votes
1 answer
155 views

Does the increasing popularity of index fund investing mean that it will become unprofitable in the future?

Index fund investing has become increasingly popular over the past 20+ years. More and more people seem to be pouring money into stock index funds in hope that future returns would be as good as they ...
Flux's user avatar
  • 17.1k
4 votes
1 answer
238 views

Why would anyone invest in an index with percent decrement?

I recently learn that there a type of index called "decrement index". For example, a MSCI world decrement 4% index will constantly underperform the MSCI world index for 4% every year. A spy ...
dodo's user avatar
  • 161
2 votes
1 answer
53 views

Comparing bond index funds: how do indexed bond funds assign the weights to their constituent investment components?

How do passively managed indexed bond funds assign the different weights to their constituent investments? Is a bond index fund, similarly to stock indexes, trying to hold a slice of all existing ...
pf_init_js's user avatar
1 vote
1 answer
171 views

Discrepancy between ETFs performance and benchmark index

I am interested in MSCI World Index and was comparing several ETFs. I can understand that performance of ETF itself can be slightly different but how is possible that there is difference in benchmark ...
Sekory's user avatar
  • 11
27 votes
6 answers
7k views

Why does this author claim that buying index funds will decrease index funds returns?

I'm reading The Beginners Investing Book by Matthew Kratter and to quote him directly: In the old days, very few people practiced indexing. That guaranteed that it would provide pretty good returns. ...
Linkin's user avatar
  • 713
1 vote
2 answers
259 views

How Can A Mutual Fund Have an Expense Ratio of Zero?

A certain brokerage claims to offer several zero expense ratio index mutual funds. My cynicism says that this is one of: a loss leader very temporary; the expense ratio will increase, possibly by a ...
Arlie Stephens's user avatar
8 votes
2 answers
3k views

As a young kid should I spend my time learning value investing or should I just chuck all my money into IVW/VOO

I have a genuine question, I am a noob at stocks. from what I have been reading value investors get higher returns than growth investors but then how come the growth etf IVW gets much higher returns ...
Linkin's user avatar
  • 713
4 votes
2 answers
677 views

How is the average return rate of the S&P 500 annual return calculated?

I am trying to understand where the famous average return rate of about 10% of the S&P 500 comes from. In most conversations, the usual starting date is on 1965. Its averaging closing value at ...
Patrick.B's user avatar
  • 143
1 vote
0 answers
71 views

What is the unhedged version of VBU?

I know I should be able to find this, but I don’t see it listed anywhere online. I want to find the Canadian version of Vanguard’s total US Bond index (BND), I see VBU but this is hedged against the ...
Dugan 's user avatar
  • 2,582
1 vote
0 answers
80 views

Finding brokers to invest in US index funds that support iraq

I live in iraq and i would like to invest in US index funds.looking at the popular brokers like robinhood and vanguard they state that they don't support investing from my country.Googling for iraqi ...
MOHAMMAD RASIM's user avatar
1 vote
0 answers
49 views

Does FoF mutual fund have higher net expense ratio than advertised? [closed]

I am looking at 2 funds. One is ETF which tracks an index. Another is Mutual Fund which invests only in the earlier ETF. Mirae Asset FANG+ Index ETF FoF MF: https://groww.in/mutual-funds/mirae-asset-...
Harshit's user avatar
  • 11
14 votes
5 answers
6k views

Do I understand correctly that while index funds (based on S&P or Dow Jones) generally go up, it might take a decade?

This is probably a simple question, but I don't know much about investing, so here goes: Some time ago, though I can't find it again now, I read a couple of responses on this site saying that these ...
ispiro's user avatar
  • 1,253
4 votes
1 answer
913 views

How to buy bond index funds only when they are mostly composed by higher interest rate (%) bonds

Vanguard states that their index funds are re-balanced every 4 months or when the management (exceptionally) considers it necessary. I imagine the FED raising rates several times during 2022 and 2023 ...
Martel's user avatar
  • 1,281
1 vote
1 answer
105 views

Consequences of liquidity crisis to passive ETFs to a buy-and-hold investor

Various sources raise the risk faced by passive investing ETFs, such as index funds, in the event of a liquidity crisis. One such example is the Investopedia article Why Passive ETFs Face Big Risks in ...
0xbe5077ed's user avatar
1 vote
2 answers
199 views

Are inflation protected bond funds a hedge against rate hikes?

Generally speaking, I'm a buy and hold index fund investor, with a long-term time horizon (20+ years). I currently keep ~12% of my account in intermediate-term bond funds. I don't usually make big ...
MikeyC's user avatar
  • 232
3 votes
4 answers
880 views

Within a single year, when is the optimal time to contribute to an IRA?

Should I be making my maximum allowable IRA contributions as early as possible in the year (for instance, Jan 1st 2023 for the 2023 contribution), or as late as possible in the year (for instance, ...
canary_in_the_data_mine's user avatar
0 votes
1 answer
250 views

I realized I am too stupid to buy individual stocks, should I use "robo-advisor" consulting?

First the facts: I opened a Swissquote account in mid 2018 (a broker similar to Robinhood in the US). My balance today: loss of -1'500 CHF, with a total investment of 26'000 francs. Especially the ...
Sybil's user avatar
  • 692
-1 votes
2 answers
102 views

What's the difference between a conventional index mutual fund and a non-conventional index mutual fund?

I read the term "conventional index mutual funds" in several places. E.g., https://investor.vanguard.com/etf/faqs: Similar to conventional index mutual funds, most ETFs try to track an ...
Franck Dernoncourt's user avatar
0 votes
0 answers
95 views

Invest 100k in the Short Term Until It Could be Used to Buy an Investment Real Estate Property

I have a little more than 100k in my savings account. I have been keeping (and accumulating) that money in the savings account hoping to invest it in some kind of an asset (real estate etc.). However, ...
c00der's user avatar
  • 111
1 vote
1 answer
85 views

UK: is it possible to buy Vanguard Growth Index Funds (VGIX)? [closed]

Is it possible to invest in the Vanguard growth index funds if you're based in the UK? Either directly with Vanguard or via a broker. I asked Charles Stanley but they don't do it. Thanks
coursepredict1's user avatar
0 votes
1 answer
112 views

How to evaluate an index? (other than PE based approach)

I am looking to invest in passive funds. In India there are least 5 popular indexes (Nifty 50, Nifty Next 50, Nifty MidCap 50, Nifty MidCap 100, etc.,). I am trying to find the most undervalued index ...
Kannan's user avatar
  • 556
1 vote
2 answers
152 views

Investing in funds via broker, funds in brokers name not mine

As the question states. I am considering investing in funds via a local broker who has quite a good reputation. It was pointed out to me that the funds, eg. BlackRock, would have no record of my name. ...
brownie74's user avatar
-1 votes
1 answer
153 views

Should I enable trading?

While looking for Vanguard 500 Index Fund Admiral Shares (VFIAX) on IBKR I landed at: And the Enable Trading at the bottom caught my attention. Do we negotiate this in a different way than i.e. VOO ...
ebepem's user avatar
  • 75
1 vote
1 answer
140 views

How is "beta" relevant to long-term ETF investors?

A portion of my investment portfolio is in index-tracking ETFs. On the whole, my ETF portfolio is diversified across many countries and industries. I intend to hold these ETFs for 20-40 years. I ...
Flux's user avatar
  • 17.1k
1 vote
5 answers
299 views

How do I choose one fund over another if "past performance does not indicate future performance"?

I want to grow my capital by investing in funds (e.g. exchange-traded funds, mutual funds). However, I always see this disclaimer: "past performance does not indicate future performance" (or ...
Flux's user avatar
  • 17.1k
7 votes
1 answer
940 views

S&P 500 constituent holdings not proportional to market cap?

The S&P 500 is a float-adjusted market cap weighted index. As of July 16 2021, the 2 top holdings are AAPL at 6.27% and MSFT at 5.78%, a ratio of 1.09. However the ratio of their market cap is ...
raj rajaratnam's user avatar
0 votes
1 answer
86 views

Meaning of "excluding components of the S&P 500" in description of Fidelity Extended Market Index Fund

Under the Additional Disclosures heading of the fund overview for the Fidelity Extended Market Index Fund it states: This description is only intended to provide a brief overview of the mutual fund. ...
Stratus3D's user avatar
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