How To Buy An Index Fund?

Almost any broker now enables us to buy an index fund. So go and ask your broker if he provide this service for you. It is important to notice that not all S&P500 index funds are equal. The difference is in the costs of maintaining fund. For example, one S&P index fund could have 5 employees and other could have 20 employees. Also, fund that buys more stocks, could have less buying costs. So how could you compare different index funds? You could check for an Expense ratio. The lower expense ratio, the better. For example, Vanguard SP500 fund has 0.15% Expense ratio. Required initial amount could be very large, but it could also be zero. In the second case we call such funds no-load funds. Obviously, no-load funds are better than other funds.

To sum it up, go to SmartMoney fund screener and find which one suits you, or just go to the www.Vanguard.com and check for "Vanguard 500 Index Fund Investor Shares". Be aware that S&P500 is copyrighted, so appropriate index funds are probably not named "SP500 index fund". The list of some SP500 index funds, you can find here. Be aware that you should do your homework and choose the best for you.


Links:

Money 70: The best mutual funds you can buy


Funds Tracking the S&P 500


COMMODITY INDEX FUNDS

Mutual Funds - Morningstar


SmartMoney’s Fund Screener