Index funds and their investment policy

Undergraduate
Essay
Miscellaneous
Pages 4 (1004 words)
Download 0
While "index funds" mentioning, the majority of investors imagine the funds, portfolio of which attached to Standard & Poor's 500 index. Of course, this is the first-rate and most popular is Vanguard 500 Index (VFINX) among them. This is the largest mutual investment fund, which is the standard for index funds…

Introduction

Unlike index funds, actively managed funds aim to reach results, which exceed whole market results or some of its components. It's important for their managers to select the stocks, necessary to buy, correctly, and also to define exactly the best selling/purchasing moment.
Unlike actively managed funds, which aim to reach results, which exceed whole market results or some of its components (it's important for their managers to select the stocks, necessary to buy, correctly, and also to define exactly the best selling/purchasing moment), index funds demonstrate more passive investment strategy.
Index funds invest assets to some basic asset classes, each of them characterized by its own flights and drops. That's why combinations of investing into funds, based on various indexes allow reaching some balance, reducing the risk and increasing invested money return.
There are five five members, who represent Standard & Poor's and the ASX. They set policy, determ index composition and administer the indices in accordance with the S&P/ASX index methodology. The investment policy includes adding, removing or by-passing any company or during the selection process.
And what about the portfolio investment ...
Download paper
Not exactly what you need?

Related papers

Investment and Portfolio Managment
Investors must take account of the interplay between asset returns when evaluating the risk of portfolio at a most basic level; for example, an insurance contract serves to reduce risk by providing a large payoff when another part of the portfolio is faring poorly. A fire insurance policy pays off when another asset in the portfolio-a house or factory, for example-suffers a big loss in value. The…
hedge funds
The term "hedge fund" involves any pooled investment medium that is (1) organized in private, (2) directed by experienced and professional investment managers, and (3) not accessible to the public. Hedge funds are supported by rich personalities and institutional investors who are regarded as primary investors. Other investors include (1) endowment funds, (2) pension plans, (3) funds of funds, and…
Investment theory and property diversification
The purpose of having all four-asset classes represented in your portfolio is to take advantage of the different strengths of each class. However, stocks are grouped together because they would, as a group, react more alike than any of the other three classes. The same thing is true for the other three classes. Many people use Real Estate Investment Trusts and other liquid investments to satisfy…
investing in mutual funds
The beauty of capital asset pricing model (CAPM) is that it not only helps the investors to calculate investment risk but also gives them a fair expected idea about the return on their investment (Fabozzi Frank, 1998). In the following paragraphs we will discuss the CAPM, its general theory, limitations and the reason of its adoption in the market…
Index funds and their investment policy
Unlike index funds, actively managed funds aim to reach results, which exceed whole market results or some of its components. It's important for their managers to select the stocks, necessary to buy, correctly, and also to define exactly the best selling/purchasing moment.…
Mutual Funds
similarly we can outline the concept of bonds. Bonds gives people chance to lend our money to the government or a company. We receive interest and principle back over pre-determined amount of time. We can say that bonds are the most common lending investments traded on the market. Other than shares and bonds there are other types of investments like real estate and precious metals but it is…