Australian index share fund? Have you ever invested in such a fund?

[advancebooking]

Have you ever invested in an Australian index share fund? Ive read that it can give a better yield than one can obtain from a bank account and also prospects of capital growth. Because the fund tracks the index, by definition it cannot go broke.

If you have invested in one of these funds before in oz can you offer your opinion? Which fund did you invest in?

thanks

[DogNo1]

Indexes may not lose all of their value but they sure can fluctuate. Take a look at the 5, 10, 20 year and even longer charts of the index that you propose to invest in. That will give you a picture of how volatile it can be. Also be cautious about concentrated indexes such as the gold miners' index ( GDX.)

Perhaps the safest index is VTI - the Vanguard Total Stock Market Index. It will not pay a high dividend but it is about as safe as you can get for a stock index. For dividends in the 4-5% range look into preferred stocks or close-ended funds. Check out Forbes. They have information on both of these. I subscribe to one of their newsletters: The Income Securities Investor Newsletter written by Richard Lehmann. Good luck with your investing!

[SheungWan]

If the fund tracks the index and the index goes down, then the fund goes down. And then of course do you know if the fund is synthetic or trading on options? What you think you are buying may not be what you are actually getting.