|
|
Post by anitya on Aug 16, 2021 13:43:11 GMT
I'm not sure I see the distinction. Per Vanguard: "An index mutual fund or ETF (exchange-traded fund) tracks the performance of a specific market benchmark—or "index," like the popular S&P 500 Index—as closely as possible."
investor.vanguard.com/index-funds/what-is-an-index-fundIf you mean that some indexes are not constituted using a market-cap weighting, I don't think that has any significance. As long as an index is constituted in some algorithmic way, a fund that tracks it is an index fund. Actually, as indexes go, the DJIA strikes me as one of the flakiest ... and constantly changing. I think with the last sentence of your post, you resolved the conundrum. If not, again, yes, literally and scientifically but if that is not how the common man uses the term, then it probably leaves you and I erudite and stuck in our zone. I just try to understand the meaning depending on the context and the person using it. For example, I just turned on Bloomy TV and Francine Lacqua (?) was interviewing a guest about equity futures being down and asked him, “in a dip (because of tapering or its anticipation) do you buy specific industries and sectors or do you buy an index?” Well, there are sector index funds too and as Yogi said there are factor based index funds too. We know she was not referring to any of those. At the end of the day, words are another clumsy means of communication! |
|
|
|
Post by jongaltiii on Aug 17, 2021 18:51:10 GMT
While SCHD is not an index fund, as that term is commonly used, I would put any strictly rules based fund (ETF) also in the index fund category. SCHD falls into that category and there are several others. Many index funds are successful (on a total return basis) but there are also many that are not. S&P 500, QQQ, etc are commonly discussed, held successful index funds. Some international equity index funds have lots of AUM but unimpressive total return. If I said in 2001 through 2008 that QQQ is a good index fund to own forever, you would have chased me out of town. I could be wrong but the only time tested successful and easy to own index funds are the cap weighted S&P 500 index and its clones like the cap weighted total market index. Disclosure: My own QQQ position happens to be three times bigger than my SPY position. I also own significant MOAT, which I do not consider as an index fund but I consider the SCHD I own as an index fund. P.S.: I am not picking anybody's side because I do not consider there is the right answer that applies to everybody. I understand each of your POV - I imagine the context if one is not clearly stated. - I don't own any ETF's (at the moment) but the more I review MOAT - the more I like it. Just need to find what fund I will replace with it. Liked their recent pivot from value to growth - uncanny timing. Can't help but like the name/concept. |
|
|
|
Post by roi2020 on Aug 19, 2021 4:49:44 GMT
While SCHD is not an index fund, as that term is commonly used, I would put any strictly rules based fund (ETF) also in the index fund category. SCHD falls into that category and there are several others. Many index funds are successful (on a total return basis) but there are also many that are not. S&P 500, QQQ, etc are commonly discussed, held successful index funds. Some international equity index funds have lots of AUM but unimpressive total return. If I said in 2001 through 2008 that QQQ is a good index fund to own forever, you would have chased me out of town. I could be wrong but the only time tested successful and easy to own index funds are the cap weighted S&P 500 index and its clones like the cap weighted total market index. Disclosure: My own QQQ position happens to be three times bigger than my SPY position. I also own significant MOAT, which I do not consider as an index fund but I consider the SCHD I own as an index fund. P.S.: I am not picking anybody's side because I do not consider there is the right answer that applies to everybody. I understand each of your POV - I imagine the context if one is not clearly stated. - I don't own any ETF's (at the moment) but the more I review MOAT - the more I like it. Just need to find what fund I will replace with it. Liked their recent pivot from value to growth - uncanny timing. Can't help but like the name/concept. These Morningstar Medalists have a significant portion of their assets tucked in wide-moat stocks. Link |
|
