Australian index funds

[Ashy]

Hello all, this is my first post on this forum. It seems like there's a good amount of knowledge here and hopefully I can learn from you guys and maybe even contribute back.

I recently went to a free seminar and consultation with a financial advisor and they were pushing passive index funds fairly hard. (They also tried to sell me some insurance so I'm not too sure about them)
Im not about to rush out and invest on some free advice though so I was wondering if anyone could point me to some good resources to read up on about aussie index funds.
Preferably ones that can be invested in through commsec.

Do the funds actually match the index results fairly closely or is it much more variable in reality?

 

[skc]

Check out this article - slightly dated but great info.

http://www.choice.com.au/viewArticl...00268&tid=100008&p=10&title=Test:+Index+funds

STW is an exchange listed fund (ETF) and has the advantage that you can purchase them on a mouse click (mostly like through Comsec I guess), plus STW has relatively low MER. The down side is that you pay brokerage everytime you want to buy so may not suit a dollar-averaging strategy (e.g. buying $X every week).

 

[peterh]

Interesting to hear of a free seminar pushing Index Funds. Generally the only way financial advisors make money from index funds is on a fee for service basis (which I think is a good way to get advice).

In addition to StreetTracks, Vanguard and BankWest mentioned in the previous post, other index providers are iShares and DFA Australia:

http://au.ishares.com/
http://www.dfaau.com/

iShares provide international indexing options. DFA is an active index manager (if it can be described that way). Travis Morien has a good website with lots of information and he is an indexing fan (and I believe a DFA fan):

http://www.travismorien.com/invest_FAQ/

With index investing a common way of approaching it is with a core/satellite approach. This is where most of your money is in index funds, but a small proportion is is direct shares (or other active funds).

Peter