If you want to be in the right place at the right time, all you need to do is be everywhere, all the time.
Each region of the world and each sector will create wealth. The key is knowing where and when that will be, in this ever more sophisticated, complex and rapidly changing world.
Designed to take full advantage of such opportunities, global index funds invest in most of the relevant and significant world’s stock markets, providing a simple tool to make sure that you’re there whenever wealth is being created. This is just one of the many reasons why these funds are attracting an increasing number of investors.Check out the index funds managed/distributed by TreeTop
Since the fund manager does not have to actively manage an index fund, it generates fewer fees and less commission, which positively impact the net return on your investments.
Generally speaking, global index funds are made up of the shares of individual companies which cover all sectors and regions of the world, together amounting to around 85% of the total market capitalisation in the world. Their diverse nature is the key to their simplicity.
No management risk
The investment goal in index management focuses solely on reproducing the performance of a given market index as closely as possible. This is the only goal that managers of this type of fund strive for when building their portfolio, and there is very little risk that they will fail to achieve it.
What is an index fund?
An index fund is an investment fund which simply focuses on reproducing the performance of a particular market index (BEL20, CAC40, NASDAQ, etc.). It is sometimes also known as passive management.
What is the difference between a local and a global index fund?
A local index fund focuses on the performance of one particular region, such as Europe. A multisectoral, global index fund, on the other hand, offers broader distribution. In other words, investing in a local or sectoral index fund involves taking more ‘active’ risks, as it pinpoints just one area on the global investment map.
- Broader distribution
- Fewer risks
- Global trends
Why is it a good idea to choose an index fund when starting out as an investor?
While setting up and managing a global, multisectoral index fund is best left to the experts, investing in one requires only minimal knowledge of the stock market. This type of fund is an ‘all-in-one’ solution. It offers you simple and reliable access to the potential of the global stock market.
Tracking the long-term performance of the global stock market .
Looking back, the global stock market is probably one of the most efficient investments you can make over the long term(1), even if it does encounter periods of significant upward and downward fluctuation. Global index funds automatically track these changes to reproduce the performance of the overall reference market as closely as possible.
(1) Source : Credit Suisse Global Investment Returns Yearbook 2018, Elroy Dimson, Paul Marsh and Mike Staunton, Triumph of the Optimists: 101 Years of Global Investment Returns, Princeton University Press, 2002