Index Fund Investment

[zac]

As well as starting a direct share portfolio, I want the bulk of my money to go into an Index Fund.
Ive seen a heap of financial Planners and unsurprisingly (due to their fee's/commissions) they recommended Managed Funds.
Having read about Index Funds I now know they are a better way to go, lower fee's, more tax effective etc.

Anyway as a substantial sum of money will be going into the fund, should it in reality be diversified? ie rather than 1 Index Fund, buy into a couple?
Im looking at a Vanguard ASX300 type Index.
The Index is already diversified to some extent as its a number of companies, however is it wise to go into other Indices. Having said that I cant seem to research any that are decent. ASX seems (historically and of recent) to be the strongest index so it doestn seem to make sense to look at others.

Also what companies (besides vanguard) can I look at for Index Fund options??
Any other relevant info will be greatly appreciated.

 

[So_Cynical]

Also what companies (besides vanguard) can I look at for Index Fund options??
Any other relevant info will be greatly appreciated.

http://www.spdrs.com.au/

State Street have 4 index funds....the oldest and biggest listed tracking funds in Australia...except for the new dividend fund.

 

[Boggo]

This (QRE) may also be worth a look.

http://www.betashares.com.au/products/name/s-amp-p-asx-200-resources-sector-etf/#each-keyFacts

Let me know what you think of it, I haven't heard much about it but I do like the sector.

 

[zac]

This (QRE) may also be worth a look.

http://www.betashares.com.au/products/name/s-amp-p-asx-200-resources-sector-etf/#each-keyFacts

Let me know what you think of it, I haven't heard much about it but I do like the sector.

Im not sure I follow what it is exactly.
Instead of buying into an Index, you buy QRE on the ASX? But then that doesnt make sense, what about management fees.
Also is it invested in the ASX200?

 

[Bill M]

Im not sure I follow what it is exactly.
Instead of buying into an Index, you buy QRE on the ASX? But then that doesnt make sense, what about management fees.
Also is it invested in the ASX200?

QRE is an index. It aims to track the price and income performance of the S&P/ASX 200 Resources Index. You buy it from your online Brokers site just like you would buy BHP. Their management fees are taken out of the fund, you don't actually pay extra for it in addition to your purchase.


There are many ETF indexes and you have to decide which ones you want to buy.

Another company that offers ETF's is iShares, link here:
http://au.ishares.com/index.do

 

[So_Cynical]

Im not sure I follow what it is exactly.
Instead of buying into an Index, you buy QRE on the ASX? But then that doesn't make sense, what about management fees.
Also is it invested in the ASX200?

zac .. if after following the link and having a read, your left feeling like you don't know what it is, its probably fair to say you need a bit of an education re your investment choices.

95% of what you need to know (basic info) can be found on the ASX site, lets start with the many indexes. http://www.asx.com.au/asx/statistics/indexInfo.do

 

[zac]

zac .. if after following the link and having a read, your left feeling like you don't know what it is, its probably fair to say you need a bit of an education re your investment choices.

95% of what you need to know (basic info) can be found on the ASX site, lets start with the many indexes. http://www.asx.com.au/asx/statistics/indexInfo.do

LOL Youre so cynical, I know about the different indices. Ive been looking at so many different ones.
ie i know even in the ASX there are heaps of types of Indices alone.
What I surprised me though is from that link given it looked like rather than buying into a fund as such you could buy QRE shares which is a combination of basically the ASX200.
Seems something is amiss though and yeah im sure my knowledge there is short.

 

[So_Cynical]

What I surprised me though is from that link given it looked like rather than buying into a fund as such you could buy QRE shares which is a combination of basically the ASX200.
Seems something is amiss though and yeah im sure my knowledge there is short.

Ok so the product in question http://www.betashares.com.au/products/name/s-amp-p-asx-200-resources-sector-etf/#each-keyFacts is a ETF (Exchange Traded Fund) so in simple terms its a fund that is traded on the ASX exchange, it has a 3 letter share code because it trades on the ASX in the same way as any other share.

Its the newish, low cost and easy way to buy into and sell out of a fund....the fund in question is a tracking fund, this fund like pretty much all tracking funds has market maker support to keep the SP within a certain range that somewhat accurately reflects the price movements of the index its tracking.

The fact sheet spells it all out for you better than i can.

http://cms.betashares.com.au/cms-admin/_images/17238678964d269a0f8955c.pdf

 

[Lone Wolf]

you could buy QRE shares which is a combination of basically the ASX200.

Just to clarify, QRE aims to track the S&P/ASX 200 Resources index. Not the ASX 200 itself. That is, it focuses only on the resource companies within the ASX 200.

If you need some more info beyond what SC has given - Take a look at the ETF knowledge centre here:
http://www.vanguard.com.au/personal_investors/investment/etfs/etfs_home.cfm

In you first post you asked - Should you diversify? Since it's illegal to give specific investment advice here, that's for you to decide. But make sure you compare the history of the funds you want to use for diversification. For example, investing in the US stock index will give you exposure to a larger range of stocks. But if you compare their index with ours you'll notice that if the US market takes a hard fall, we'll be going down with it. So is that really diversification?

 

[Boggo]

LOL Youre so cynical, I know about the different indices. Ive been looking at so many different ones.
ie i know even in the ASX there are heaps of types of Indices alone.
What I surprised me though is from that link given it looked like rather than buying into a fund as such you could buy QRE shares which is a combination of basically the ASX200.
Seems something is amiss though and yeah im sure my knowledge there is short.

QRE is not "QRE shares", it is a ETF that attempts to track the ASX resources sector, it contains quantities of companies contained within that sector.

Read again what So Cynical and Lone Wolf are explaining.