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Can you explain what you mean by a No Load Index Fund? Can you give an example or two? Thanks.

encoderer 15y ago
A type of fee commonly levied on mutual fund investors is called "Load." It's a fee you pay either when you buy shares of the fund (front load), or when you sell them (back load). Load is evil and should be avoided. Index Funds are mutual funds that are not managed. That is, there's no manager and team of assistants that spend time curating the assets in the fund. These peoples salaries and their trading activities cost money and that comes out of your gains. Index funds are simple: Take a snapshot of the market, say the NASDAQ or S&P 500. Determine the total pie -- add up the market value of all the companies in the index. Suppose AAPL is 15% of the total value, MSFT is 10%, etc. Take all the assets in the fund and spend 15% on AAPL stock, 10% on MSFT stock, etc. Rebalance periodically as needed. Index funds have historically out-performed most managed funds. There are some winners. Some managed funds that have huge market-beating gains. But trying to pick these big winners is not a sound investment strategy.
PotatoEngineer 15y ago
It's a mutual fund that's designed to follow a particular stock index. For instance, there are funds that will exactly mimic the Dow Jones Industrial Average, or Standard & Poor, or other such indexes. And there's a pretty large number of indexes, so if you have an interest in biology, or tech companies, or junk bonds, you can find an index for it. Here's the Vanguard fund for the actual Dow Jones Index: https://personal.vanguard.com/us/FundsMSChart?Ticker=^DJI https://personal.vanguard.com/us/FundsMSChart?Ticker=^DJI As for "no-load", that means there aren't any fees taken out of your account. Mutual funds take fees from your account to pay for their trades, and it's usually 1-2%. Index funds are brain-dead to manage, so they usually have either a very low load, or no load.

A type of fee commonly levied on mutual fund investors is called "Load." It's a fee you pay either when you buy shares of the fund (front load), or when you sell them (back load). Load is evil and should be avoided. Index Funds are mutual funds that are not managed. That is, there's no manager and team of assistants that spend time curating the assets in the fund. These peoples salaries and their trading activities cost money and that comes out of your gains. Index funds are simple: Take a snapshot of the market, say the NASDAQ or S&P 500. Determine the total pie -- add up the market value of all the companies in the index. Suppose AAPL is 15% of the total value, MSFT is 10%, etc. Take all the assets in the fund and spend 15% on AAPL stock, 10% on MSFT stock, etc. Rebalance periodically as needed. Index funds have historically out-performed most managed funds. There are some winners. Some managed funds that have huge market-beating gains. But trying to pick these big winners is not a sound investment strategy.

PotatoEngineer 15y ago

It's a mutual fund that's designed to follow a particular stock index. For instance, there are funds that will exactly mimic the Dow Jones Industrial Average, or Standard & Poor, or other such indexes. And there's a pretty large number of indexes, so if you have an interest in biology, or tech companies, or junk bonds, you can find an index for it. Here's the Vanguard fund for the actual Dow Jones Index: https://personal.vanguard.com/us/FundsMSChart?Ticker=^DJI https://personal.vanguard.com/us/FundsMSChart?Ticker=^DJI As for "no-load", that means there aren't any fees taken out of your account. Mutual funds take fees from your account to pay for their trades, and it's usually 1-2%. Index funds are brain-dead to manage, so they usually have either a very low load, or no load.