Index funds invest Caution "tracking error continues to avoid large funds"

[Korea goyounghun financial newspaper reporters] are things to be known as index funds also note that it is relatively safe investment. Tracking Error or repurchase up when this is it.

According to Korea on the 14th Financial Investor Protection Foundation can be dangerous when daepyogyeokin investment funds and passive index funds when entering a "leveraged" or "inverse" in the name can be traced risk.

Investor Protection Foundation, said, "If the 'leverage' or 'inverse' to enter the name must never buy the illusion because other products," said "even track the same index There are differences in how each fund manager fees and charges accordingly, including costs should make sure there is a difference in performance is also different, "he urged. If you enter a high-risk leveraged products that invest in futures.

The index may see a loss if the index fell significantly higher probability of a gain on the redemption day time when long-term investment. I think the index side is good for long-term investors Investor Protection Foundation, he said that because the index has faith in the long run will increase.

The purpose of investing in an index fund is an index fund chasing the overall market index such as the KOSPI index by sector rather than by pursuing the index returns are safe.

Fund tracking error is going to continue should also be careful. Tracking error is an indication of how much difference did the index fund returns and index returns. If the tracking error should be taken largely from continued investment.

Cost index funds are generally lower than other equity funds. However, because of slightly different by each Fund when investing should check the total fees and commissions.

Investor Protection Foundation gwonsunchae chief researcher, "you can call the long-term cost difference is greater cumulative return the difference at the time of investment, if not greater exponent index fund revenues before inter-deductible expense management differences follow the same" and "index funds that track the same index When compared to the investment costs, rather than tracking error explained that it is recommended to choose a fund. "



Financial Daily Economic News FNTIMES - unauthorized reproduction for commercial purposes in accordance with the Copyright Act, No copying, distribution,
Copyright ⓒ Korea's financial newspaper & FNTIMES.com