Index investment

Index investment and is, in performing the diversification of the strain is a way to reliably can be obtained market average equivalent performance at a lower cost.

The index investment, such as "Nikkei average" and "S & P500 (US)" and "Hang Seng Index (China, Hong Kong)", and then held the shares to be linked to the typical stock price index of the market. In this way, since the result of the equivalent index can be obtained, and investment way to take a reliable average point.

The investment trust that specializes in the index operation is called "index funds", also many of the ETF (exchange traded funds) is performing the index operation.


Active fund can not win in the index fund?

In recent years of research, investment trust to perform the index operation, is to leave the higher performance than conventional investment trust (active fund) has revealed.

Since the stock index is not represent the average of the market, some funds that exceed the index, the same it is a translation that comes out also fund below approximately the same number of index. Index funds to leave the always index and equivalent return, do not know how active fund exceeds or-below.

Moreover, since the active fund is expensive the cost of ownership (trust fees and success fees), even if higher than the index in the buying and selling of stock, you get there a lot also cases that falls below the index and subtracting the cost. Trust fees of typical index fund whereas a range of about 0.1 to 0.5 percent, because the trust fees of active fund even take 1-2%, it is to cost defeated.

From these results, the theory that "it's best to make the asset management in index mutual funds" is becoming the mainstream in recent years. Kano Warren Buffett also (own despite the genuine active management), it is about the general investors have said the comments should be operational in the center of index funds such as ETF, and.

But there is also a point that should be noted. The ETF that is listed in Japan, are also included those not in the index operation. Especially emerging ETF such as Shanghai stock ETF (1309) and Brazil ETF (1325), which is operated by those that do not hold shares of cash "linked notes", investment funds is absolutely if bankruptcy is guaranteed source of company note that there is a possibility that you do not come back is required.