Course 303: Choosing an Index Fund
Know Your Options
In this course
1 Introduction
2 Know Which Index the Fund Follows
3 Know Your Options
4 Know the Tax Effects
5 Know the Costs

Thanks to the variety of index funds, you have much more flexibility than a decade ago, when tracking the S&P 500 was one of the only indexing options. Today, you can build a well-balanced portfolio made up entirely of index funds.

Here are some common indexes; there are various funds tracking these indexes, or some variation on them.

  U.S. Stock Indexes
Wilshire Large Growth
Screens 750 largest U.S. stocks for sales growth and other growth indicators.

S&P 500
500 of the largest U.S. stocks, both value and growth.

Wilshire Large Value
Screens 750 largest U.S. stocks for lowest P/E and P/B.

Wilshire Mid-Cap Growth
Screens 501st to 1,000th largest U.S. stocks, following same criteria as Wilshire Large Growth.

S&P 400
501st to 900th largest U.S. stocks, both value and growth.

Wilshire Mid-Cap Value
Screens 501st to 1,000th largest U.S. stocks, following same criteria as Wilshire Large Value.

Wilshire Small Growth
Screens 751st to 2,500th largest U.S. stocks, following same criteria as Wilshire Large Growth.

Russell 2000
1,001st to 3,000th largest U.S. stocks, both value and growth.
 
  International Indexes
MSCI World
Designated to track equity market performance of 24 developed market countries worldwide 

MSCI EAFE
Designed to track equity market perfromance of 22 developed market countries worldwide, excluding the U.S. and Canada.

 

MSCI Emerging Markets
Designed to track equity market performance of 21 emerging market countries, including Brazil, Russia, India, and China.
 
  Bond Indexes
BarCap Aggregate Bond Index meant to be a proxy for investment-grade bond market in the U.S.

Next: Know the Tax Effects >>


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