Financial Success Guide

What are ETFs, and Index Funds?

Section 28 Module 6

Index Funds

Note: The typical rates of return quoted above are average rates of return over a 8-10 year investment period.

Index Funds

  1. Indices are the average performance of the top stocks in the stock market of that country.
  2. Warren Buffett Recommends Investing In Low-Cost Index Funds / ETFs.
  3. You can only buy an Exchange Traded Fund that mirrors an index, and ETFs are generally much cheaper and perform much better than than mutual funds.
  4. The Nifty50 is the average performance of the Top 50 stocks in the Indian Stock market. The S&P 500 is the average performance of the top 500 stocks in the US stock market.
  5. Index Funds are a safer way of investing in the stock market.
  6. Index Funds are not capital protected, and you could lose some of your money, if you exit your investment too soon.
Remember - If a company that is on the index today loses its value or goes bankrupt, it will be replaced by the next biggest company automatically.