The investment decisions change from person to person but when going for investment in mutual funds or index funds, there are benefits of its own. To earn dramatic returns one may opt for actively managed funds. Here are some of the Low-Cost Index Funds to go for in 2019 by FinanceShed.
What Are Indexed Funds?
Indexed funds are the funds in which the portfolio of the investment is made up of the stocks of the standard stock exchange scripts. Some of the indexed funds are standard & Poor’s 500 index. Generally, the indexed funds are considered to be the ideal form of funds for the long term and risk-free investments.
The indexed funds are popular as they will have the features of the standard index of the stock exchange so that there will be changes in the price of the fund in such a manner that changes happen in the standard market so the risk will be less as the whole market risk is generally less than any individual stock.
Some Best-Indexed Funds To Invest In
- Vanguard 500 index fund investor share: It is the index which has given the returns to the investors up to 13.87% over the investment period of 3 years, it is one of the best-indexed funds as there is high returns as well as the lower expense ratios i.e. the average expense ratio of the fund was 0.02% in the recent time.
- Schwab S&P 500 Index Fund: This index fund is the fund that will invest your money in the S&P 500, almost 80% of the fund investment is in the stocks comprising in the S&P 500. The expense ratio of the Schwab S&P 500 Index Fund is one of the lowest among the indexed funds at 0.02%.
- Vanguard growth index: The expense ratio of the Vanguard growth index is around 0.14% and also you need to provide the minimum investment amount to the fund i.e. $3000. The returns of the fund are also very high and the benefit is that you can invest in both ways, as ETF as well as the lump sum payment.
- Fidelity zero large-cap index: The best thing about this fund is that there is no expense for the investors while they invest in the stock, there is an expense ratio of 0%. It is possible as they don’t take the licensing fees of investing in the S&P 500 stocks.
- IShares core S&P 500 ETF: This is the share that has the expense ratio of 0.04% and considered to be a viable option to invest for the long term. The market cap of the fund is almost as big as $160 billion.
What You Should Consider While Buying These Cheap Funds?
While going for these index funds the first thing to make sure is that are they really cheap? There are certain factors that affect the cost of index funds that are hidden. One needs to consider the fact that the cost of acquiring the fund is not the only cost to be paid at rates such as repo rate, reverse repo rate, policy rates, etc. affects the cost one has to pay.
Also cheap doesn’t always mean safe. Thus before going for these tempting low-cost fund, one must consider the risk tolerance, overall cost along with the hidden costs, financial goals and objectives, tax factor, etc.