An index fund is a form of passive investing with a portfolio constructed to match or track the components of a market index. Index fund managers don't try to beat the market. Rather, their goal is to replicate the performance of a market index as closely as possible. The key advantage for investors is broad market exposure with low operating expenses and low portfolio turnover. Costs are kept lower than actively-managed funds because any trading activity is solely focused on maintaining index weights.
AMP Capital offers a range of passive funds for clients seeking low-cost exposure to listed markets. Current options available provide investors with exposure to New Zealand shares, global shares, global bonds and Australasian listed property sectors.
Index funds offer:
Low-cost access to listed markets
Diversified exposure to a range of New Zealand and global asset classes
A simple way to replicate an index in your portfolio
Tax advantages of PIE-compliant funds for certain investors