By Richard Ferri
All The instruments and strategies you want to make investments effectively in High-Yield, Low-Risk Index Funds
The up-to-date moment variation of Richard Ferri's bestselling All approximately Index Funds deals person traders an easy-to-use advisor for capitalizing on one among state-of-the-art most well liked making an investment areas_index money. This wealth-building source presents crucial info on index money; professional suggestion on the best way to begin making an investment; and profitable recommendations for prime returns with low risk.
The moment version of All approximately Index Funds features:
- Updated tables, charts, and knowledge on functionality, charges, and new money
- Step-by-step counsel on energetic indexing and dialogue of its increasing position
- Coverage of all new U.S. fairness indexes that experience replaced the dynamics of the index fund industry and a brand new bankruptcy on commodities and commodity index cash
- Vanguard's revision of the indexes it makes use of for benchmarking
- Discussion of the expanding approval for ETFs for powerful asset allocation
Read or Download All About Index Funds: The Easy Way to Get Started (All About Series) PDF
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Extra info for All About Index Funds: The Easy Way to Get Started (All About Series)
In 1999 the Bank of New York introduced the NASDAQ-100 Trust under the unit investment trust structure. The NASDAQ-100 Index is made up of the largest 100 stocks that trade over the counter in the NASDAQ marketplace. The trust was nicknamed Cubes because the exchange symbol it trades under is QQQ. In 1999 technology stocks were bubbling hot, and Cubes gained a massive following by institutional and individual investors. 91 percent of the QQQ. The largest holdings were technology stocks Microsoft, Intel, and Cisco Systems.
These stocks would replace the stocks that they sold. This entire transaction created a risk-free profit for the in- 05 6/27/03 46 8:12 AM Page 46 CHAPTER 4 stitutional investor. If the SuperUnits were selling at a premium, there was a reverse trade that allowed investors to profit risk-free. Although the arbitrage of SuperUnits sounds like a lot of work, institutional investors could accomplish the task with a few keystrokes. The redemption feature built into SuperUnits neatly eliminated the discount and premium problem that plagued closed-end funds.
Needless to say, computers must be at the heart of every index fund, but readily available computing power was prohibitively expensive until the mid-1970s. Thus, index funds had to wait. A second reason index funds did not make an earlier appearance was that they were cost prohibitive. Prior to 1976 Wall Street was on a fixed commission rate system, which means fund managers could not negotiate lower trading costs with brokers. Index funds make a lot of small trades, and a high commission rate would wipe out any advantage.