Personal Finance and Money Stack Exchange
Personal Finance and Money Stack Exchange

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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Do index funds really have double-digit percents annual return rates?

For the first time in my life I'm looking into where to put my money and I came across index funds. I find it very suspicious that: whatever index fund I come across, the history never goes back to before 2010. the return rates are super high. For…
UTF-8
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Why index funds have different prices?

When index funds track the same index, why then do they have different prices? For example, I see a large difference between Vanguard, Fidelity, and Schwab index funds when they all track, for example, S&P500. Is the price proportional to their…
Rohit
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Pros and cons of investing in a cheaper vs expensive index funds that track the same index

I would like to invest $1000 in index funds. Both Vanguard and Schwab track the same S&P 500 index. However, Vanguard's S&P ETF has a unit price of $196 and Schwab's S&P mutual fund has a unit price of $35. For $1000, I would get 5 Vanguard ETFs…
Rohit
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Investing in low cost index fund -- does the timing matter?

I'm a young person with some money to start investing. I do believe in the superiority of low cost index fund over actively managed fund. But I still freeze up a bit about the timing of when to start my first buy in. Sure, I understand that there's…
Heisenberg
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Constituents of S&P 500 Top 50?

Try as I might I can't find the current constituents of the S&P 500 Top 50 index: http://us.spindices.com/indices/equity/sp-500-top-50 That link only lists the top 10 constituents by weighting. And there is a Guggenheim fund that tracks it which…
user128807
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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 predict the earnings for his investment?
Victor123
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How do the people who made the index portfolio make money?

I am reading that if you want to start out investing long-term, start with index funds, as they take care of selecting the stocks and diversifying the portfolio, and all I need to do is invest in the fund. Ok, but surely the ones who did all that…
Massum
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How does an index rearrange its major holdings

At this link they show the major holdings for the technology index fund (XLK): http://ca.finance.yahoo.com/q/hl?s=XLK Now let us say the major holding AAPL keeps going down. At what point would the index rearrange itself (either by removing AAPL or…
Victor123
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Why are there no index tracker funds for frontier markets?

I am relatively new to investing (using Hargreaves Lansdown) and have built a portfolio of low cost index tracker funds. Given my age (27) I have opted for more risky assets (i.e. my portfolio is skewed towards emerging markets) with the idea that I…
dippynark
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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 allocate capital to businesses. A world in which…
Flux
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How do you find an index fund’s tracking error?

Where do you find, or how do you calculate, the tracking error for an index fund? Every guide I've read about index funds mentions tracking error (the difference between the fund's return and the benchmark its tracking) as an important metric, but…
Cerin
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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 lot, and soon a scam, i.e. there's some other way…
Arlie Stephens
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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, what happens to the value of index funds? Even…
Learner
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How index creating companies make money?

I imagine the index creating company would have many experts analyzing the market and sell the index information. Do they sell this information to multiple brokerage companies? If yes, then would there be much difference if I had invested in funds…
Kiran
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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 equal here?
daisy
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