Pricing

100,000+ Ready-Made Designs, Docs & Templates to Start, Run and Grow your Business

Subscribe to Download

7+ Industry-Specific Index Fund Templates in PDF | DOC

An index fund refers to a type of mutual fund or exchange-traded fund designed to follow certain predetermined regulations so that a specific underlying investment basket can be tracked by the fund. In other words, is a type of mutual fund with a portfolio designed to match or follow financial market index elements, such as the 500 Index of Standard & Poor (S&P 500). When this mutual fund is specifically designed for a certain industry, it is known as an industry-specific index fund.

200,000+ FREE & Premium TemplatesBeautifully Designed, Easily Editable Templates to Get your Work Done Faster & Smarter.

7+ Industry-Specific Index Fund Templates in PDF | DOC

1. Vanguard Communication Services Index Fund Template

Details
File Format
  • PDF

Size: 456.4 KB

Download

2. Mutual Fund Industry Selection and Persistence in DOC

Details
File Format
  • DOC

Size: 119.1 KB

Download

3. Industry-Specific Index Fund Template

Details
File Format
  • PDF

Size: 478.2 KB

Download

4. Industry-Specific Sector Fund Investing Format

Details
File Format
  • DOC

Size: 7.7 KB

Download

5. Industry-Specific Index Fund Management Template

Details
File Format
  • PDF

Size: 226.3 KB

Download

6. Industry-Specific Choosing Index Fund Example

Details
File Format
  • DOC

Size: 8.4 KB

Download

7. Industry  Index Mutual Funds Template

Details
File Format
  • PDF

Size: 521.8 KB

Download

8. Industry-Specific Index Funds in PDF

Details
File Format
  • PDF

Size: 265.5 KB

Download

What is Index Fund?

An index fund refers to a type of mutual fund or exchange-traded fund designed to follow certain predetermined regulations so that a specific underlying investment basket can be tracked by the fund. Such rules may include monitoring prominent indices such as the S&P 500 or the Dow Jones Industrial Average or enforcing rules such as tax management, reducing tracking errors, large block trading, or patient/flexible trading techniques that allow for better tracking errors but smaller market impact expenses. The construction rules of an index fund specifically identify the type of enterprises that suit the fund. The S&P 500 Index Fund, the most commonly known index fund in the United States, is based on the rules for its S&P 500 Index set by S&P Dow Jones Indices. Equity index funds will include equity classes with similar features such as company size, valuation, productivity and/or geographical location. A collection of stocks may include U.S. firms, Non-U.S. established, emerging markets or countries on the frontier market. Business indexes that include rules based on company traits or variables such as small, medium, high, low, large value, small growth, huge development, overall productivity or equity resources, or resource and set-income indexes may include specific index funds within those geographic markets. Many index providers disclose adjustments of the firms in their index before the actual transition date; no such announcements are made by other index providers.

Indexing Methods

There are essentially three types of indexing methods:

Traditional Indexing

Indexing is typically known as having a representative stock portfolio, in the same proportions as the target index. Alteration or adjustment of security assets only happens annually as businesses reach the target index or exit it.

Synthetic Indexing

Synthetic indexing refers to a modern strategy of making use of a mixture of equity index futures contracts and low-risk bond investments to mimic the performance of a similar total investment in the index equities. Although retaining the future role has a marginally higher capital structure than conventional passive sampling, synthetic indexing may lead to more favorable tax treatment, particularly for international investors subject to US dividend withholding tax. The portion of the bond can hold higher-yielding instruments, with a correlating greater risk trade-off, a method called enhanced indexing.

Enhanced Indexing

Enhanced indexing refers to a capture-all term that refers to index fund management improvements which emphasize efficiency, possibly through active management. Enhanced index funds utilize a multitude of improvement methods such as custom indexes (rather than depending on commercial indexes), trade methods, regulations of marginalization, and scheduling strategies. Through employing active management the cost-benefit of indexing could be reduced or eliminated. Improved indexing techniques help to offset the tracking error ratio that would result from expenditures and transaction costs. These improvement strategies may be:

  1. lower price, selection of issues, positioning of yield curves;
  2. sector and placement of quality, and positioning of exposure calls.

Benefits of Index Funds

Low costs

Since the structure of a specific index is a known commodity compared to the actively managed mutual funds, it costs less to operate an index fund. Generally, index fund expense levels vary between 0.10% and 0.70% for the large US-based company indices for emerging market indexes. The expenditure ratio of the typical large-cap professionally managed mutual fund as of 2015 is 1.15%.[15 ] If a bond fund achieves a 10% gain before expenditure, the difference in expenditure ratio will result in a gain after an expenditure of 9.9% for the high dividend index fund versus 8.85% for the actively managed large-cap fund.

Simplicity

Mutual funds efficiency targets are simple to understand. When an investor knows a mutual fund’s target index, they will specifically decide what securities the index fund will carry. Managing one’s index fund assets can be as easy as restructuring every six months or annually.

Lower turnovers

Profit margin or turnover applies to the Fund manager’s sale and purchase of securities. Selling shares in some jurisdictions may lead to tax charges on capital gains, which are sometimes passed on to fund shareholders. Even without taxes, the profit margin has both overt and covert expenses that significantly decrease dollar-for-dollar returns. Since index funds are passive investments, turnover is significantly smaller than that which is invested in the stock market.

No style drift

Style drift happens when the active management of the mutual funds moves beyond their defined style such as mid-cap value, large-cap profits, and so on, to maximize returns. Style drift happens when the active management of the mutual funds moves beyond their defined style such as mid-cap value, large-cap profits, and so on, to maximize returns. Drifting into other styles may decrease the diversity of the entire portfolio and increase the risk thereafter. This drift is not possible with an index fund, and it increases accurate portfolio diversification.

You may also like

Read More Articles about

Investment Template

200,000+ FREE & Premium

Beautifully Designed, Easily Editable Templates to Get your Work Done Faster & Smarter.

View All Templates