CHAPTER 7. Index Funds and ETFs
What is Index Funds?
Index funds are mutual funds designed to track a specific index.This funds are run by fund managers seeking to mimic an index (i.e., earn above average returns) rather than beat a given index.
What is the advantage?
1. Index funds seek only to mimic an index, they can be run for significantly lower costs than other actively managed mutual funds. Low cost mutual funds tend to outperform high cost funds because the less a fund charges, the more returns.
example:
- Typical actively managed mutual fund- expense ration : roughly 0.7%
- Index funds : easy to find 0.1% or less
2. Many of them are very broadly diversified which means if you buy just three index funds, you could have a portfolio consisting of several thousand company from across the globe.
example: Vanguard 500 Index Fund covers 500 of the largest publicly traded companies in the U.S.
What is Exchange Traded Funds ( ETFs)
ETFs are essentially index funds that are bought and sold like regular stocks.
It means ETFs can be purchased via any brokerage firm such as Vanguard, Fidelity, Schwab and E*TRADE with small money.
example: VOO -Vanguard S&P ETF
What’s different between Index fund and ETF?
- ETF can be purchased in real time while the stock market opens but Index Fund can be purchased after the stock market closes via mutual fund company.
- Mostly ETFs are few hundreds dollars but you need at lease few thousands dollars for Index funds.
최종요약
- 가장 신뢰할 수 있는 최고의 수익을 보장 할 수 있는 펀드를 찾을 수 있는 방법은, 수수료를 적게 가져가는 펀드를 찾는 것이다.
- 적은 수수료로 투명하고 광범위하게 다양하고 많은 회사들을 포함하는 Index Fund와 ETF들이 포트폴리오를 구성하기 좋다.
과제 ( 질문 )
펀드는 안정적인 수익율이 장점인 상품으로 보여지는데요. 그래도 전반적인 주식 시장의 영향아래 있으니, 아무리 폭넓게 포트폴리오를 구성하더라도 항상 + 수익율을 유지하지 못할 수도 있을 것 같습니다.
그동안 펀드를 운영하면서 잘해왔던 점 한가지와 후회되는 점 한가지를 공유해 주세요.
p.s 역시 이해한것과 다른 사람에게 정리해서 설명하는 것은 차이가 크네요. 잘못된 부분은 댓글 부탁 드립니다. ^^
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