Index Funds in USA, Uk, India - Basics, How to Invest & Best Index fund 2021...
INTRODUCTION
So, here is the best way today we discuss that how you can invest Index Funds in the USA, Uk, India - Basics and on which index you need to invest in 2021 if you are under these 3 countries if you are a beginner don't worry about that we discuss basics also in this sessions so without wasting any time let's get started...
what is an index fund- Basics...
Basics-->
so before we move on to what is an index fund is an index first let's try to understand why do we need an index We will understand this as an example, what is an index fund?
so for example In us, the UK, or India have different states or cities as well as in the stock market we have different stocks which are listed on the stock exchange
like how many stocks are listed in New York stock exchange or you can say in India Bombay stock exchange yeah obviously there are more than 5000 companies are listed in these stock exchange market
now if someone asks you how is the market performing today and if you start saying that the first company up by this much second company down by this much for 5000 company's people will go mad and what will you understand in last,..." nothing "
so, if someone were to tell you a representational figure all in all markets are performing better as compared to yesterday
"what is that representational figure that is nothing but an index"
and everyone knows NYSE Composite in the USA and in India nifty 50 these are nothing but nifty is a representational figure of top 50 performing company and NYSE for top 2000 performing company
Index fund-->
let's try to understand the index fund this index fund is going to copy the index if you don't know what is index read the upper part in the basics section
the same thing is what an index fund going to do like if the index has 50 company's in India and in USA index has 2000 company the same 50/2000 company will form a part of this index fund
assuming its an NYSE composite index fund right now can there be a shuffling in the company assume that out of these 2000 company's 2 company's go out and new to company has come in can it be like out of 2002 go out and no replacement never it will happen it has to be 2000 company for sure
as same as index fund performing...
"In simple index fund is nothing but like a mutual fund which is going to exactly copy an index"
why index funds (benefits of an index fund)?
so, now let's understand why index funds are the preferred choice of many investors the biggest reason is " cost "
here cost means I am talking about the expense ratio so if I talk about the average expense ratio for a large-cap mutual fund it's almost around 1.5% whereas the average expense ratio
for an index fund is just 0.2%
then what is the difference between these let's understand it by some example
let us say if you invest 14000$ or 10 lakh rupees in a mutual fund for 20 years at a CAGR of 15%
--------------------------------------------------------------------------------------------------------------
expense ratio amount at end of 20 year
1.5% 1,68,852.03$ / 1,25,86,855 rupee
0.5% 2,12,044.40$ / 1,58,06,574 rupee
---------------------------------------------------------------------------------------------------------------
as you can see upside how much big difference between those index fund and a large-cap mutual fund that's why all investors suggest index fund
note- in a similar scenario, an investment of 10 lakh would save you 32,190 over 20 years
Active funds vs Index funds-
there might some people who tell you why index funds active funds can surely generate better
returns compared to an index fund is are they wrong absolutely not there are many index funds
which have given better returns than index funds also then what is the problem the problem
is that you will have to take that extra effort to find out active mutual fund which are
performing better
example till a few years ago if A mutual fund was one of the top performers in the active
funds right now if you see many of the access mutual fund is doing better as compared to
the other
They keep on coming in different mutual fund profits every year and provide you
convenience, what is your job in this, you have to find out which company is giving better
performance and if you do not want to put so much effort, then one of the simplest The solution is an index fund
are the number of index funds which are performing better than active funds is that improving or if i were to put it other way are the number of underperformers in the active funds growing as compared to index funds
How to invest in index funds
so, now you can understand what is the main criteria for choosing the index funds
1. lowest expense ratio
2. tracking error
In India "Navi" mutual fund which has the lowest expense ratio, you can't believe the expense
the ratio of Navi is just 0.06% The lower the expense ratio, the more return you will get, I have
a list of those in which you invest, you will get benefits. There is only one such index fund
in India Navi which gives RETURN less than 0.5%
"Navi" mutual fund which is founded by Mr. Sachin Bansal who is also the co-founder and ex-chairman of Flipkart brand
In USA list of the index fund in USA market which has lowest expense ratio-:
INDEX FUND EXPENSE RATIO
Fidelity ZERO Total Market Index Fund (FZROX) 0%
Fidelity ZERO Large Cap Index (FNILX) 0%
Fidelity ZERO Extended Market Index (FZIPX) 0%
Fidelity ZERO International Index (FZILX) 0%
Schwab S&P 500 Index Fund (SWPPX) 0.02%
Schwab Total Stock Market Index Fund (SWTSX) 0.03%
Schwab U.S. Broad Market ETF (SCHB) 0.03%
Schwab U.S. Large-Cap ETF (SCHX) 0.03%
iShares Core S&P Total U.S. Stock Market ETF (ITOT) 0.03%
iShares Core S&P 500 ETF (IVV) 0.04%
Vanguard S&P 500 ETF (VOO) 0.03%
Vanguard Total Stock Market ETF (VTI) 0.03%
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) 0.04%
In UK list of index fund uk market that gives you lowest expense ratio in 2021
The cheapest UK ETFs. by total expense ratio (TER)
1 Lyxor Core Morningstar UK NT (DR) UCITS ETF - Dist 0.04% p.a.
2 HSBC FTSE 100 UCITS ETF GBP 0.07% p.a.
Best Index fund company in 2021
Now I think you must have understood what is an index fund and which index fund will be
very good for you, then start investing for your future today. The list shown above which
company gives you the lowest ratio may be weekly or monthly this is an updated list
which is able to give you the highest returnYou always have to be updated to invest, the
company's expense ratio always keeps on decreasing on monthly or yearly basis.
CONCLUSION
" so, the final conclusion is index fund is better then active fund all you need to follow
some point to choose index fund is low expense ratio and tracking error if you invest
14000$ for 20 years under the expense ratio is 0.03% then total amount you get
6,22,089$ amount There are many such plans in the market which perform better than
index funds, you just have to invest them only after doing them unexpectedly. "
FAQ-)
____________________________________________________________________________
1) should i invest on index fund in 2021
ans-: yes
2) which is the best investment plan
- ans-: Liquid Funds.
- Short-Term & Ultra Short-Term Funds.
- index funds
- and much more
3) Is there any mutual fund which gives less expense ratio better then index fund
ans-: yes
___________________________________________________________________________
that's it for today guys we will meet in next blog thank you and support us..
Post a Comment