14 Nov 2020
Should I invest in index or mutual funds?
To answer that question, you should first understand the differences between the two, before arriving at a decision.
Index funds tends to be more passive investment instruments, with the purpose of mirroring index returns (e.g. if the annual S&P 500 gain was 5%, the returns on an S&P500 Index Fund will aim to be around 5%). Because this mode of investment is less actively managed, management fees are lower.
Mutual funds, on the other hand, employ fund managers to actively manage the fund. (aka higher management fees) Each fund has a different investment objective, and mutual funds in general aim to beat the index.
Index funds - passively managed, mirrors index returns, low management fees
Mutual funds - actively managed, aims to beat the index, high management fees
Which fund to invest into would really depend on your risk appetite, and your investment goal (how much returns do you aim to achieve, relative to risk)
If you're new to investing, you may want to check our robo-investors (eg Stashaway, Syfe, Endowus) as well. They are pretty easy to use and consist of a mix of ETFs.
Should I save a monthly goal and use that to invest? My goal is long term growth.
Yup, I think that's a great strategy! :)
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Avoid some things mentioned here:
Etfs have lower expense ratio, but if u're keen in mutual trusts, check out endowus for low fees uni...
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