"I want to get married by the age of 30 and have two children." What is the money plan for a 2-year-old woman?
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For long-term investments, I believe that world equity index funds will be the basis.
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MONEY PLUS is an economic media that conveys financial and economic information in an easy-to-understand manner for people who are not good at talking about money.
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Usually the fundbenchmarkToStock indexExactly the same stock composition as the stock group adopted byOf each companystockThe rate of inclusion in the fund is also proportional to the degree of influence on the stock index.
In addition, when the stock index is replaced, the fund will also sell stocks of companies excluded from the index and purchase stocks of companies newly adopted in the index. It will be a factor for falling stock prices for companies that have left off, and a factor for raising prices for newly hired companies.
History, background, theory
In the majority of mutual fundsActive fundThe investment results are far below those of index funds. This was known in the academia, but Burton G. Markir (Burton Malkiel) Published in 1973 "Wall Street Random Walk" (A Random Walk Down Wall Street)Became widely known. In response to the reaction, "Isn't it possible to invest directly in the index?"
1975 May 12,Vanguard GroupFounder ofJohn BogleFirst index fund set up by.. The fund has become increasingly popular,2000 ToFidelity InvestmentsManaged to overtake the Magellan Fund, which is probably the most prominent active fund in the world, by net assets.
Financial Services AgencyAccording to the asset management industry advancement progress report 2020 announced on June 6, 19,Sharp ratioWhen compared withTrust feeEven the state before takingPassive operationWhile the investment trust of is 0.42,Active operationThe investment trust of is 0.29, and the investment performance is better in passive management.Furthermore, since the trust fee is higher for active management, when it is taken into consideration, passive management is 0.40 and active management is 0.20, and the performance of active management is further deteriorated.professionalbyActive fundIs getting worse by buying and selling, but he is getting a commission even though he made it worse..
By the way, it is difficult for beginners to actively operate while identifying trends and rotating.Because of stock prices, bond prices, etc.Financial instrumentsThis is because the trend changes as the price goes up and down.
How to construct an index fund
There are three main methods for constructing an index fund.
- Perfect law
- Stock indexA method to buy and sell all the stocks that make up the stock according to the index composition ratio. Since it has the exact same structure as the index, it is highly linked to the index. A certain amount of assets is required to invest according to the index composition ratio. Trading costs are high because trading occurs every time the index is changed or the ratio is changed.
- Extraction method
- A method that aims to link to the index by buying and selling only a part of the stocks that make up the index. Compared to the perfect method, there are fewer issues to hold, so trading costs are less likely to occur, and it is easy to build a fund even with small asset amounts. On the other hand, the difference between the index and the constituent stocks or the constituent ratio causes the tracking error.
- Synthetic replication
- In kindDerivativesA method of combining transactions and aiming to link to the index.A method of filling the gap between the cash stock basket and the index that occurs due to stock replacement or change of ratio with derivatives.
Tracking error and its cause
Tracking error is an index that indicates how far the price movements of index funds and portfolios in index investment deviate from the target index. It is expressed as the standard deviation of the return of the fund or portfolio and the price movement of the index, and is used as an index of the risk of the index fund.
The main causes of tracking error are
- Trading time discontinuity
- Trading unit discontinuity
- Operating costs
Regarding 1., when it becomes necessary to buy or sell a constituent stock due to fluctuations in the weight of the constituent stocks or the movement of cash due to the addition or cancellation of a fund, ideally, the trading should be repeated each time to create an ideal configuration. It would be good if it could be a ratio, but in reality it is impossible in terms of trading fees.Therefore, by trading only at a specific time, a deviation from the ideal composition ratio will occur.
Regarding 2., when the constituent stocks are weighted on the net assets, a fraction is generated for the trading unit of the stocks.For this reason, instead of adopting index weighting as it is (called the perfect method), a method of optimizing the weighting of stocks so as to reduce the deviation from the fund's assets (called the optimization method). Is often used.
Regarding 3., the actual operation costs (trading fees, trust fees, taxes) are deducted from the assets of the fund.This amount can be confirmed by the actual results of the operation report and the prospectus.
Index fund types
Index funds are so-called unlisted investment trusts in a narrow sense, and index-linkedListed investment trustThere are two types. Usually, only the former is called an index fund.
Index types that aim to be linked
The following are the main indices that index funds aim to link.
- Stock index
- Bond index
- NOMURA-BPl (Japan)
- Citigroup World Government Bond Index (World)
- Lehman Brothers US Comprehensive Index (US)
- S & P Citigroup Global RElT Index (World)
- TSE RElT index (Japan)
- CRB index
- Dow Jones AlG Commodity Index
- ^ If the target index is composed of a large number of stocks, such as several hundreds, there may be cases where not all of them are constituents of the fund.
- ^ "Random Walk on Wall Street" by Burton Marquier ISBN-978 4532352608
- ^ "Vanguard 500 Index Fund"
- ^ Publication of "Asset Management Advancement Progress Report 2020": FSA
- ^ Taro, Maru. Why Index Investing Is Best: Investing Series with the s & p500