- Index funds cost less. Passive funds require less legwork, so they typically charge lower fees than actively managed funds. In managed funds, high fees can easily eat into any returns gained by the broker.
- They can achieve higher returns. Indices have been proven to frequently beat the average returns achieved by fund managers over many years. Coupled with lower fees they make good investing sense.
- Ease of trade. Many ETFs listed on the ASX are index funds, which are easily accessible on broking platforms.
- It can diversify your portfolio. Investing in an index fund offers access to a range of companies from various sectors.
- They're relatively safe. Index funds are considered a safer alternative to direct stock market investing because indices are generally less volatile than individual stocks.
Thursday, 16 July 2020
Note to Self 5
Invest in index funds when you have the chance....
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