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the difference between Spiders & index funds?
By The-Adviser.com -
|New York - Some investors believe that index investing (investing in
mutual funds that track specific market indices) are the most
cost efficient investment strategies. Index mutual funds have
low management fees and low turnover because they don't
change unless the underlying index adds or subtracts a new
Spiders are an alternative to index mutual funds. Spiders standard for "Standard & Poor's Depositary Receipts." Spiders in essence represent a trust that own the stocks of the S&P and are designed to be worth one-tenth of the daily quoted value of the S&P 500. They trade on the American Stock Exchange under the symbol SPY.
The following are the major differences between Spiders and Index funds?
Given the fact that Spiders are more complex investments to understand - most investors considering index investing should stick with index-based mutual funds.
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