IndexFunds March 9, 2001 Issue No. 000107
IndexFunds Company News and Announcements
Our index coverage has expanded immensely! We now list hundreds of domestic and international Dow Jones indexes that are updated daily. Please visit our new Dow Jones Index Center.
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Featured Articles
New This Week
S&P 500 Index Funds
So you've done your research, poked around the discussion boards on this site, and have come to conclusion that you want to sleep well at night and invest in an index fund. Congratulations. By far, the index with the most money benchmarked to it is the Standard & Poor's (S&P) 500 Index, with over a trillion dollars. There are gaggles of index funds out there that seek to replicate the returns of the S&P 500, and the beginning investor may feel overwhelmed by all the options. It seems simple enough: the fund tracks the index, so the manager just rebalances the fund when changes are made to the index. So why so many funds that track the S&P 500? The answer is that fund managers are competing for your money, and ultimately you reap the benefits. Issues article by John Spence
indexfunds.com
ICI Study
Using mutual fund redemption rates to determine investor holding periods isn't kosher, according to recent research by Investment Company Institute (ICI). The problem with redemption rates, which measure annual fund redemptions as a percentage of average assets, is that a small minority of high-turnover shareholders can significantly jack up a fund's redemption rate. This scenario can potentially skew the holding period of the typical fund investor if it is calculated using redemption rates. Issues article by John Spence
indexfunds.com
Free Investment Advice
The Vanguard Group and Financial Engines have inked an alliance that will allow retail investors of Vanguard funds to receive portfolio investment advice at no charge. Vanguard will initially offer the service in the second quarter to participants in employer-sponsored retirement plans, and later to Vanguard fund individual investors. The package was originally designed for retirement planning, but Financial Engines is expanding the service to allow retail investors to analyze an entire investment portfolio. News article by John Spence
indexfunds.com
Socially Responsible
FTSE, the index provider jointly owned by the London Stock Exchange and the Financial Times, announced that it plans to launch a new series of indexes for socially responsible investment (SRI). Called the FTSE4Good family, the indexes will go live in June 2001. There will be four indexes in all covering the following regions: the U.K., the U.S., Europe, and the globe. For each region, there will be two indexes - a tradable index of the top 100 (by market capitalization) socially responsible companies and a broader benchmark index for which the number of constituents will not be fixed. News article by John Spence
indexfunds.com
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Previous Articles
New Tech Indexes
As of yesterday, the Dow Jones Technology Sector Index was down over 53% for the year, and predicting when the tech sector will actually bottom out seems to be the main hobby of financial writers and pundits these days. Amidst these unhappy times for tech, Upside Media recently launched a set of indexes designed to measure the performance of the high-technology industry and the sub-sectors that make it up. Upside Media, which covers the hi-tech industry, has launched 15 indexes in all. The Upside.com 150 index is designed to track the entire sector. News article by John Spence
indexfunds.com
Eaton Vance Survey
One of the most popular investment products of the 1990s - passively managed index funds that mimic the movements of major market indices - may have reached a peak in their popularity," says a new report by Eaton Vance, a Boston-based investment management firm. Eaton Vance conducted a national telephone survey of 500 Americans who have invested in both qualified retirement plans and other investments such as mutual funds, individual stocks, or money market funds. The median annual income of respondents was $100,000. Issues article by John Spence
indexfunds.com
MSCI Real-Time Indexes
Morgan Stanley Capital International (MSCI) today launched over 750 global sector, regional, and country indexes that will be updated in real time. The indexes cover developed markets and Asian emerging markets, and will be updated every 60 seconds for 23 hours each day. The indexes are broken down into 10 sectors, consistent with MSCI's Global Industry Classification Standard (GICS), an organizational system developed jointly by MSCI and Standard & Poor's (S&P). News article by IndexFunds staff
indexfunds.com
Asset Allocation
The path to a broadly-diversified portfolio involves a careful examination of one's assets to form a clear picture of which asset classes are underweighted or overweighted. For example, a heavy allocation in technology or real estate could end up being painful if the sector goes in the tank. Investors who sleep best at night have their investments spread out to cover a big chunk of the market. But many individual investors are hitting a big pothole on the road to diversification. Too many investors are failing to recognize how inherent assets figure into their overall portfolio. Issues article by John Spence
indexfunds.com
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Our discussion boards are a haven of brilliant and independent thought: Any question is welcome on the Beginner's Board, The Main Board is the central discussion forum for all matters having to do with index funds, and on the ETF Board you can banter to your heart's content about these crazy things they call exchange-traded funds that seem to be sweeping the globe and changing the face of indexing. URLs for discussion boards follow:
indexfunds.com
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Don't know what half the jargon on this newsletter means? Come and Learn. One good run through all the listed articles and tools in the Learn section, combined with some recommended reading from our Books page, should have you fully up to speed and ready for sensible index investing.
Short-Term Returns 1 wk to 3/9 1 mo to 1/31 1 yr to 1/31
Russell 2000 -0.21% 5.21% 3.69%
Russell 3000 -0.37% 3.42% -0.39%
Dow Jones Industrial 1.70% 1.02% 0.98%
Nasdaq -3.06% 12.23% -29.63%
S&P 500 -0.06% 3.55% -0.90%
3-month T-bill -2.34% 0.46% 6.31%
30 yr bond -0.82% 1.41% -14.71%
VG REIT 0.17% 0.43% 26.13%
Annualized Returns 5 yr to 1/31 10 yr to 1/31
Russell 2000
11.47% 15.12%
Russell 3000 17.51% 17.20%
Dow Jones Industrial 17.08% 17.48%
Nasdaq
21.21% 20.94%
S&P 500 18.36% 17.36%
3-month T-bill 5.36% 4.93%
30-yr bond -1.67% -
Complete Returns to 1/31/00: indexfunds.com |
