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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3answers
184 views

In what way do index funds “free-ride on the work done by active investors”?

I was reading Can You Really Game Index Funds?: One of my little stock-market obsessions is that index funds free-ride on the work done by active investors. Someone needs to make decisions that ...
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1answer
30 views

What's the relationship between SPDR S&P 500 ETF listings in different countries?

SPDR S&P 500 ETF Trust is listed on four stock exchanges: NYSE Arca — Symbol: SPY ISIN: US78462F1030 Currency: USD Listing date: 1993-01-22. (source) Singapore Exchange — Symbol: S27 ISIN: ...
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3answers
221 views

Why buy index funds when they are guaranteed to underperform their index?

I am frequently advised against picking individual stocks. The usual argument is that it is difficult for individual investors to beat stock market indexes. I don't understand this defeatist attitude. ...
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2answers
412 views

How can I lever up my index fund returns?

Suppose I am very confident that the 1 year and 5 year returns of an index-tracking ETF will be positive. How can I lever up the returns? For example, when the ETF increases by 5%, how can I achieve ...
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2answers
94 views

ETF of 2000 or more stocks but excludes stocks from the S&P 500?

I believe the S&P 500 is overvalued and small-cap stocks are less overvalued. So I would like to buy market index (like 2000 or 5000 companies) but without the S&P 500 companies. Are there ...
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1answer
125 views

Do all major indexes make sense for regular passive investment?

There are articles that say "buying" an index is a very good approach to investment, that beats most of the active funds. But, looking at the value of FTSE 100 for the past 20 years, it has ...
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1answer
47 views

Index Options + Options calculator [closed]

I noticed that even though SPX and SPY track the S&P Index (I realize latter is an ETF and 10x lower), the options prices for a particular chain that I observed today are not exact. They're ...
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4answers
3k views

Why don't index ETFs use leverage to offset their fees and eliminate tracking errors?

If a hypothetical stock index returns 100%, an ETF tracking the index might only return 99% because of ETF fees. This introduces tracking errors. Why don't index ETFs use leverage to offset the fees ...
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1answer
112 views

Why don't accumulation index funds (dividends are reinvested) raise more than the indexes they track?

Let's suppose a fund is tracking an index A, and let's suppose that it does it with 100% of accuracy. Therefore, given a particular period of time, the value of the fund should fall and rise exactly ...
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1answer
153 views

How do I invest in an index fund in EU? (or UK)

I have almost €70,000.- saved and after reading about index funds, I got very curious. I am a Spanish citizen living in the UK, and I assume there are some tax implications that I am completely ...
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1answer
80 views

How can I buy an ETF on Stock Exchange of Hong Kong as an investor in the USA? [closed]

I want to buy shares in 9169.HK Vanguard Total China Index ETF in USD. Their How To Invest page says "You can buy Vanguard ETFs through a brokerage firm during normal trading hours." But ...
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1answer
58 views

ETFs/Index Fund vs Superannuation

newbie here. My understanding says index fund and superannuation products are both funds that invest in stocks, commodities, bonds etc etc For Index funds, an investor gets units for regular ...
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1answer
74 views

I invested in a leveraged (x3) ETF but it does not grow as the underlying index. What went wrong? [duplicate]

I invested in Ayalon Extreme S&P 500 which is leveraged S&P. But its graphic does not follow the graphic of S&P. This is S&P which recently improved historic maximum: And this is the ...
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1answer
89 views

How is a new index fund created?

When a new index fund is created, how does it go from a concept to product? Where does the money come from to buy the initial investments that are needed for the fund to have its advertised ...
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2answers
180 views

QQQ vs. VOO in the long term. Which one is better ceteris paribus?

Look at the charts of QQQ and VOO. Obviously QQQ beats VOO. Expense ratio: VOO is 0.03% and QQQ is 0.2% Assuming QQQ will keep beating VOO within the next 30 years, does it make sense to pay 0.2% to ...
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2answers
73 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
78 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
265 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
57 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
52 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
123 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
110 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
123 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
175 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
217 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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0answers
33 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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0answers
55 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
146 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
172 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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2answers
64 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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2answers
113 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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0answers
16 views

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
255 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
199 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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2answers
78 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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3answers
142 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
47 views

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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0answers
110 views

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
281 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
180 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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2answers
96 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
363 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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0answers
122 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
62 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
430 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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