Thursday, January 27, 2011

Upsurge of the Index Fund and the ETF

An irony of the financial forum is that the mass of effort put into trumping the benchmarks of the market turns out to be not only feckless but in fact counterproductive. As a result, the average investor lags the market averages. The shortfall of performance applies to the corps of professional managers as well as the throng of amateur players.

For this reason, a growing number of investors have taken up the goal of simply keeping up with the market yardsticks. To this end, the express goal of an index fund is to track a benchmark of the market.

A popular type of index fund takes the form of the exchange traded fund (ETF). The advantages of the ETF lie in the cost-effectiveness of the vehicle as well as the convenience in buying and selling the shares.

Read more on Investment Funds.

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