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I think it would be good to clarify what is meant by "tracking" or "index tracking", since this term is probably jargon to a layperson. It would be easiest to link-out to another article that provides a definition of this term; though, I could not find one. Does anyone know of an article subsection that defines index tracking? If there's not a good way to clarify what is meant by index tracking, near the beginning of the article (there probably is), I've drafted a footnote that could work.
{{refn|group=nb|''Tracking'' refers to the practice of investing in a representative quantity of securities within a market index (such as the S&P 500), so as to replicate the performance of this index.}}
==Notes==
{{reflist|group=nb}}
I haven't seen many 'nota bene' footnotes on wikipedia in recent years, so I'm not sure whether footnote definitions are still au courant according to MoS.
Thoughts? Niubrad ( talk) 08:45, 19 April 2017 (UTC)
I am wondering, if index funds become more and more popular, would that cause like a feedback loop scenario?
There should be some valid disadvantages. Perhaps we can say that an index fund will not outperform the target index. (while pointing out that it should not under-perform the target index)
Controversial disadvantages:
I think it is important to add back the advantage/ disadvantages that were seen on the other entries, with some of the recent edit these issues were simply deleted due to Point of View differences. Personally the benefits outweigh any disavangates that might be seen. Paul.Paquette ( talk)
I will have some new contents that will fix the POV issues, peacock terms, and a more encyclopedia style. -- MegaHasher 21:56, 7 January 2006 (UTC)
Index funds are not very glamorous, and they lack the excitement and mystery of the active funds.
Rather US-centric. What are the tax implications in other jurisdictions? Leibniz 14:09, 5 February 2006 (UTC)
I changed the following sentences because of poor english and crazy claim about unamericanness:
When Bogle started the First Index Investment Trust on December 31 1975, it was labeled Bogle's follies and regarded as un-American, because it sought to achieve the averages rather than insisting that Americans had to play to win. This first Index mutual fund offered to individual investors was later renamed the Vanguard 500 Index Fund, which tracks the Standard and Poor's 500 Index.
has been changed to
Bogle started the First Index Investment Trust on December 31 1975. It was later renamed the Vanguard 500 Index Fund, which tracks the Standard and Poor's 500 Index.
Let me know if you disagree. Njerseyguy 18:28, 3 August 2007 (UTC)
I am scratching my head on this addition. I am sure index funds are used as templates in portfolio constructions all the time. MegaHasher ( talk) 03:05, 10 December 2007 (UTC)
Diversification has it's own section but should it also be included as an advantage? Pocopocopocopoco ( talk) 05:41, 10 December 2007 (UTC)
Dear all, I have a few small changes to this article, mostly spelling and grammar. If you disagree with something feel free to object or change back. You can leave me a message here as well so I can understand your direction and purpose. Our common goal is to improve these articles and I look forward to working together to achieve that end. My apologies in advance if I step on anyone's toes as that is not my intention. Best Wishes, Keithbob
"The examples and perspective in this article may not represent a worldwide view of the subject. Please improve this article and discuss the issue on the talk page. (February 2014)"
Why not? I couldn't find any comments here. Can I delete "Globalize |date=February 2014 |discuss=Talk:Index fund#Globalize"? — Preceding unsigned comment added by 87.174.223.245 ( talk) 17:27, 5 January 2015 (UTC)
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The tax section fails to mention the tax headaches that an investor holding mutual funds in a taxable account can face if he ends up in an international situation. Note that most mutual funds only provide tax documentation for a single country's tax laws, causing a huge nightmare when filing in a different country (or as the case of a US citizen living abroad) filing taxes in more than one country.
If a US citizen holds a foreign mutual fund then he is at peril, although some of this peril can be avoided if the foreign mutual fund provides a PFIC annual information statement, provided the US taxpayer files US tax form 8621 in a timely manner and declares the foreign fund as a qualified electing fund. The basic principle of international tax is that US law regards anything foreign as a possible suspicious tax dodge, and congressmen feel stupid when a rich guy with fancy lawyers uses international means to avoid US tax. Because of this, US law tries to close all possible loopholes, and in doing so hurts innocent legitimately international US citizens. The closed loophole in question here is hiding income-generating assets in overseas shell corporations or mutual funds to avoid receiving a 1099 form each year reporting the taxable income and gains/losses. The harsh response of US law is in sections 1291-1299 of the US tax code, and you can absolutely get hammered to the point of paying more than 100% tax on capital gains after an extended holding period. (Ill-gotten capital gains are backdated by the IRS over the entire holding period, taxed at the highest marginal rate for prior years even if they are gains and not income, and then back-interest is applied on taxes on backdated gains.) This would cause the bizarre situation of wanting to sell an appreciated asset at zero gain for the original purchase price instead of the market price, which would run afoul of securities law.
British law is also hostile to foreign investments, but I am not familiar with the details because I only had a US-citizen-resident-in-canada siutaiton. A friend of mine is a US citizen resident in Britain, and he pays an accountant $10K/year to prepare his US taxes, even though after the foreign tax credit his US tax burden is always 0.
OK, I don't have time to write a carefully referenced article for wikipedia about international tax hazards of mutual funds, but the article needs to mention this. If you are a US citizen and move overseas then you will file taxes in two countries, and take tax credits on both returns for taxes paid in the other country. The tax treaties are supposed to protect you from double taxation, but there are many devils in the details, and basically you are screwed by very small difference in definitions of things between the domestic and foreign tax codes. If your mutual fund does not provide the correct tax reporting documents for the foreign country and for the USA then you are screwed. If your mutual fund does provide the correct documents and you don't file them correctly in a timely manner then you are also screwed.
27.33.172.206 ( talk) 06:10, 29 August 2018 (UTC)
"As of 2014, index funds made up 20.2% of equity mutual fund assets in the US". Is this the best that we can do, figures from 10 years ago? I'm not suggesting a better source as this is not my field, but I suspect this is double that now.
Is it okay if I update with new figures from same source ? https://www.ici.org/fact-book 2024 Thomasthetanker ( talk) 16:27, 28 May 2024 (UTC)
![]() | This article is rated C-class on Wikipedia's
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I think it would be good to clarify what is meant by "tracking" or "index tracking", since this term is probably jargon to a layperson. It would be easiest to link-out to another article that provides a definition of this term; though, I could not find one. Does anyone know of an article subsection that defines index tracking? If there's not a good way to clarify what is meant by index tracking, near the beginning of the article (there probably is), I've drafted a footnote that could work.
{{refn|group=nb|''Tracking'' refers to the practice of investing in a representative quantity of securities within a market index (such as the S&P 500), so as to replicate the performance of this index.}}
==Notes==
{{reflist|group=nb}}
I haven't seen many 'nota bene' footnotes on wikipedia in recent years, so I'm not sure whether footnote definitions are still au courant according to MoS.
Thoughts? Niubrad ( talk) 08:45, 19 April 2017 (UTC)
I am wondering, if index funds become more and more popular, would that cause like a feedback loop scenario?
There should be some valid disadvantages. Perhaps we can say that an index fund will not outperform the target index. (while pointing out that it should not under-perform the target index)
Controversial disadvantages:
I think it is important to add back the advantage/ disadvantages that were seen on the other entries, with some of the recent edit these issues were simply deleted due to Point of View differences. Personally the benefits outweigh any disavangates that might be seen. Paul.Paquette ( talk)
I will have some new contents that will fix the POV issues, peacock terms, and a more encyclopedia style. -- MegaHasher 21:56, 7 January 2006 (UTC)
Index funds are not very glamorous, and they lack the excitement and mystery of the active funds.
Rather US-centric. What are the tax implications in other jurisdictions? Leibniz 14:09, 5 February 2006 (UTC)
I changed the following sentences because of poor english and crazy claim about unamericanness:
When Bogle started the First Index Investment Trust on December 31 1975, it was labeled Bogle's follies and regarded as un-American, because it sought to achieve the averages rather than insisting that Americans had to play to win. This first Index mutual fund offered to individual investors was later renamed the Vanguard 500 Index Fund, which tracks the Standard and Poor's 500 Index.
has been changed to
Bogle started the First Index Investment Trust on December 31 1975. It was later renamed the Vanguard 500 Index Fund, which tracks the Standard and Poor's 500 Index.
Let me know if you disagree. Njerseyguy 18:28, 3 August 2007 (UTC)
I am scratching my head on this addition. I am sure index funds are used as templates in portfolio constructions all the time. MegaHasher ( talk) 03:05, 10 December 2007 (UTC)
Diversification has it's own section but should it also be included as an advantage? Pocopocopocopoco ( talk) 05:41, 10 December 2007 (UTC)
Dear all, I have a few small changes to this article, mostly spelling and grammar. If you disagree with something feel free to object or change back. You can leave me a message here as well so I can understand your direction and purpose. Our common goal is to improve these articles and I look forward to working together to achieve that end. My apologies in advance if I step on anyone's toes as that is not my intention. Best Wishes, Keithbob
"The examples and perspective in this article may not represent a worldwide view of the subject. Please improve this article and discuss the issue on the talk page. (February 2014)"
Why not? I couldn't find any comments here. Can I delete "Globalize |date=February 2014 |discuss=Talk:Index fund#Globalize"? — Preceding unsigned comment added by 87.174.223.245 ( talk) 17:27, 5 January 2015 (UTC)
Hello fellow Wikipedians,
I have just added archive links to one external link on
Index fund. Please take a moment to review
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Cheers.— InternetArchiveBot ( Report bug) 00:03, 13 November 2017 (UTC)
The tax section fails to mention the tax headaches that an investor holding mutual funds in a taxable account can face if he ends up in an international situation. Note that most mutual funds only provide tax documentation for a single country's tax laws, causing a huge nightmare when filing in a different country (or as the case of a US citizen living abroad) filing taxes in more than one country.
If a US citizen holds a foreign mutual fund then he is at peril, although some of this peril can be avoided if the foreign mutual fund provides a PFIC annual information statement, provided the US taxpayer files US tax form 8621 in a timely manner and declares the foreign fund as a qualified electing fund. The basic principle of international tax is that US law regards anything foreign as a possible suspicious tax dodge, and congressmen feel stupid when a rich guy with fancy lawyers uses international means to avoid US tax. Because of this, US law tries to close all possible loopholes, and in doing so hurts innocent legitimately international US citizens. The closed loophole in question here is hiding income-generating assets in overseas shell corporations or mutual funds to avoid receiving a 1099 form each year reporting the taxable income and gains/losses. The harsh response of US law is in sections 1291-1299 of the US tax code, and you can absolutely get hammered to the point of paying more than 100% tax on capital gains after an extended holding period. (Ill-gotten capital gains are backdated by the IRS over the entire holding period, taxed at the highest marginal rate for prior years even if they are gains and not income, and then back-interest is applied on taxes on backdated gains.) This would cause the bizarre situation of wanting to sell an appreciated asset at zero gain for the original purchase price instead of the market price, which would run afoul of securities law.
British law is also hostile to foreign investments, but I am not familiar with the details because I only had a US-citizen-resident-in-canada siutaiton. A friend of mine is a US citizen resident in Britain, and he pays an accountant $10K/year to prepare his US taxes, even though after the foreign tax credit his US tax burden is always 0.
OK, I don't have time to write a carefully referenced article for wikipedia about international tax hazards of mutual funds, but the article needs to mention this. If you are a US citizen and move overseas then you will file taxes in two countries, and take tax credits on both returns for taxes paid in the other country. The tax treaties are supposed to protect you from double taxation, but there are many devils in the details, and basically you are screwed by very small difference in definitions of things between the domestic and foreign tax codes. If your mutual fund does not provide the correct tax reporting documents for the foreign country and for the USA then you are screwed. If your mutual fund does provide the correct documents and you don't file them correctly in a timely manner then you are also screwed.
27.33.172.206 ( talk) 06:10, 29 August 2018 (UTC)
"As of 2014, index funds made up 20.2% of equity mutual fund assets in the US". Is this the best that we can do, figures from 10 years ago? I'm not suggesting a better source as this is not my field, but I suspect this is double that now.
Is it okay if I update with new figures from same source ? https://www.ici.org/fact-book 2024 Thomasthetanker ( talk) 16:27, 28 May 2024 (UTC)