how to invest in index funds

robinlacey

hi everyone,this is my first post here,i may be a little out of my depth...

anyway,i am looking to invest some money over the next while,and from what i have read,i have decided to put some money into index funds
however,thats about as far as i have got.
i would like to know,first of all,if i can put money into american index funds from ireland, (and other countries too i suppose) and secondly,if there is an irish equivalent index fund i could put money in...
any suggestions about the logistics of doing this would be appreciated too....

disclaimer:obviously i'm not going to take the first thing i read here as official financial advice and run out and follow it to the letter,nor will i hold anyone but myself responsible for any decisions i make....i'm just looking for any relevant information which might be helpful,all of which i will investigate fully myself....


thanks in advance,
robin

hmmm

Firstly, you're dead right choosing index funds.

Unfortunately I haven't come across many index funds in Ireland. Quinn Life's products I believe are index funds, but fees are in the 1-1.5% range. When you compare this to the US where there is a developed index funds market with fees of sometimes less than .5%, you'll see we're losing out badly. The Quinn fees are still lower than most active funds, and I believe they don't charge for once off additions to existing policies you might have.

Vanguard (biggest US company offering index funds) I notice will take money off of Irish customers, but you need 100k or so to open an account.

One interesting alternative is what are called ETFs. They are typically index funds that are quoted on the stock market, so you can buy them as you can buy shares. They typically charge less than .75% a year in fees which is excellent.

The main downsides of ETFs I'd see:
- You have to pay a stockbroker commission
- You may have to hold them in a stockbrokers nominee account - more fees
- There is a spread

If you're thinking of putting in small amounts ETFs probably aren't cost effective once fees are included. With larger lump sums or if you are investing for long terms then they may work to your advantage. I'm in the lucky position of getting discounted fees with my company buying ETFs, but even with the cost of the spread I figure that the advantage of low expense ratios mean that if I buy and hold for 20 years I will be well up on ordinary index funds (1% difference in fees makes a huge difference long term - do the maths )

robinlacey

cheers for the response...
i think i'd prefer to just stick to index funds,does anyone know if any of the other companies accept irish customers with a small minimum deposit?

otherwise i might just stick my savings into an interest bearing account and wait till i have enough to open a vanguard account