Dividend Index Funds And Smart Beta Strategy

Investors all around the world are finding new ways and devising new strategies to build a portfolio which outperforms the market.There are different types of investors in the market with different preferences who aim to achieve a different objective than the others. Thus, financial services are coming up with different investment plans and funds which can reflect the different investment segments. One such investment plan is Dividend Investing where the investors invest in Dividend Index Funds. These are for investors who are basically looking at their income growth and dividend index funds help these investors to invest in stock in portfolio of stocks which usually higher dividends than expected. In financial terms, they invest in companies with a higher dividend yield.

An investor’s goal is to make returns higher than the market’s. They are constantly looking for ways in which they can build a portfolio which is competent enough to beat the market. In their chase to earn higher returns, many fund managers have formulated a strategy known as the Smart Beta strategy which uses different index construction methods rather than the traditional equity index to build a portfolio. The funds are not managed actively but they take care of the volatility in the market so that it doesn’t affect the fund performance.

Such strategy has been proven to be less costly than most actively managed funds and like most other strategy aims at diversification to maximize returns with the least cost. There is no one way to form a Smart Beta strategy. This makes it more flexible. The fund managers in order to gain higher yields can spread the investment amount to various different avenues.

Truly, the financial world has grown tremendously. Each market is interlinked with another in such an intricate way, that whatever investment approach you choose, it will get affected by the world and domestic market movement. As an investor, you need to understand the risks and rewards before narrowing down to one strategy. Understand your own needs first and then the market. Lastly, invest smartly!

Source : http://thematicinvesti.livejournal.com/3030.html

What is thematic investing and how can it maximize your returns

Over the years, many innovations in investment and their strategies have floated around in the market. Each new strategy builds the way to successful investment by maximizing the returns. In any investment strategy, one thing to keep in mind is your smart work and understanding of market than the application of investment strategy itself. There are different approaches which aim at maximizing the total return indices. One such approach is Thematic Investing. When you are using this approach in investment, what you are doing is ideally is taking advantage of the future trends. Being a top-down approach, it helps the investors to gain exposure to the macroeconomic themes and trends through managed funds or baskets of related stocks. This type of investment can replicate some Equity Index or any Custom Index. Usually, it can be seen to replicate some form of Exchange Traded Funds. It recognizes that the world is changing rapidly and incorporates a deep understanding of the underlying drivers of long-term value creation and risk.

So the next question is, how can thematic investing maximize the portfolio’s returns?

Low Correlation

This approach to investing offers low correlation to the returns of traditional growth strategies and a negative correlation with the relative returns on traditional value strategies which can lead to diversification of portfolio for the investor. Diversification of portfolio can help the investor to maximize returns with minimum risk.

Alpha at scale

The alpha measures the performance of your fund against a specific benchmark index. Benchmarks usually capture the past successes. While thematic investing seeks to capture the future growth which helps the investors to earn market premium.

Hedge against Rapid Change

Since this investment approach focuses constantly on the secular changes and disruptive innovation, this method of investing can offer a portfolio hedge in a rapidly changing world and can complement the traditional index-based strategies.

One last thing to remember is although thematic investing comes with the potential of high returns, the risks are not to be ignored. Before using the approach, do our homework and constantly update your understanding of market. Market and economy can change rapidly with the structural changes and this can affect your returns. So, place your bets carefully and invest smartly!

What Are Index Funds And How Is It Better Than Most Actively Managed Funds

An index is a statistical measure of the changes in the value of list of stock prices which are considered to represent the whole market. An index will help you check the performance of country’s stock market and compare your portfolio’s market. However, these index figures don’t appear magically appear. There are various organizations that are involved in index services. These companies, not surprisingly, are known as index providers or index company. They are not only involved in index calculation but also index development and maintenance, making sure that they reflect any changes in the economy, market, and investor’s sentiments.

Now, that the basics of indices are covered. Let’s move on to the investment strategy that’s a result of index. The investors today are familiar with the term, Index Investing. In this, what you simply do is invest in something called, Index Funds. These funds can be thought of as mutual funds which are based on a specified index and you try to create a portfolio which mirrors the index’s performance.

Like Index funds, mutual funds are aimed to beat the performance of market by diversifying the investment. However, most of the mutual funds fail to outperform the market index. The main reason of mutual fund’s underperformance is the cost that mutual fund charges. Such actively managed funds tend to charge higher to investors in order to cover their own cost.

The main advantage of index funds is lower management fees. This helps in higher returns than most actively managed funds. Since, index funds follow the average, they spend very less. This is reflected in the total returns of your fund. The reason behind this lower cost is that the fund is not actively managed. The fund managers only need to maintain the appropriate weightings of the stocks in the selected index to match its performance.

Once you invest in index funds, you are guaranteed market average returns. However, do not be misled! There are risks as well. You’ll lose in a bear market and go up in bear market. The important thing to remember is do not sell in bear market, you might miss the return of recovery.

Source : http://thematicinvestings.page.tl/What-Are-Index-Funds-And-How-Is-It-Better-Than-Most-Actively-Managed-Funds.htm

How Important are the Stock Market Indices In The Financial Markets

Over the years, the importance of indices has grown in the financial sector. Be it the indices for bonds, commodities, or equity. It is now yardstick to measure how the financial markets are performing. Indices help an investor know which financial instrument are doing well and which are not. It has now become the most important measure to check whether their investment is doing well or going down the drain. These indices are calculated by companies known as Index Provider. They are not involved in the task of calculating these indices but also Index Maintenance to check and incorporate the daily changes of the market in the value of indices.

Coming back to importance of indices, one such segment where indices hold a great significance is the stock market. Although stock markets are more dynamic than what the indices suggest, along with the fact that there are different ways of index calculation, causing calculation bias, stock market indices are important to various investors in many different ways. First, it gives an historical perspective of the performance of the stock market which gives investors more insight on their investment decisions. If an investor is not sure about where to invest in individual stocks, indexing can help an investor decide. If the investors want to match the performance of the market, they can simply invest in index mutual funds or index exchange traded funds. This helps the investors to do as well as the market and their portfolio doesn’t underperform as well.

As mentioned before, indices can be a yardstick for investors. This can help the investors to compare the performance of their individual stock portfolios. Individual investors who have professional managers handling their portfolio can use indices to check how their portfolio is performing. Finally, the last way in which indices help is as a forecasting tool. By analyzing the historical trend of the indices, an investor can predict the future perform of the market and choose his investment route accordingly.

Sure, there are many ways to compare and measure the performance of your investment and stock market. However indices provide the first step in that path. So, as a smart investor, you don’t want to ignore them.

Source : https://thematicinvestings.wordpress.com/2017/01/11/how-important-are-the-stock-market-indices-in-the-financial-markets/

Why should you plan on taking professional help

Since a very long time, investing in different investment platforms has become a very popular thing among youngsters and the individuals who want to earn and save at the same time. Investing is a very good option as you get to save a part of your earnings quite easily without having to think about low returns. At the same time you also get very high returns from the investments. So knowing about the different Index Development helps you to earn a lot of dividend on the investment that you make. When you are investing money in such platforms, you can easily get a professional to help you with the same.

Professional take on investing

A professional will have a very clear idea regarding the working of the market and the different platforms that will help you to earn a lot of returns at low cost. Smart Beta is the best way to understand the different rates at which you might be earning the dividend. A professional will be able to help you understand the platforms and thus create a portfolio for yourself. At the same time, you also need to have a good idea regarding the Index Company that will help you to get high returns at minimum costs.

Managing your portfolio

When you are creating a portfolio for yourself, you can be sure that you would want to earn a lot through it. A good professional will use different strategies to help you earn the dividend that you are looking for. At the same they will manage your account for you. Earning returns on your investment is not the only thing. Reinvesting the returns in order to get the best from your investment will help you to get the best from your investment.

Investing is a very good option for all individuals who are looking to take a bit of risk and earn high returns. Any good professional will be able to help you earn the returns that you are looking for with the help of their knowledge and expertise in this field. So make sure that you are hiring the right individual for your needs.

Source : https://sites.google.com/site/thematicinvestings/why-should-you-plan-on-taking-professional-help

Know what you invest in

Many youngsters and new employees are planning on investing a part of their savings into different types of platforms that will help them to earn a lot of dividend. With the help of Thematic Investing you can easily get the returns that you are aiming for but at a very low risk rate. This is a very good thing as you not only end up saving apart of your income but also earn some money on that income. If you keep your savings in a bank you actually end up getting very less return on the same in the form of interest. But with the help of investments you can earn a lot of dividend. But do you have sound knowledge about the share market?

Getting a professional to step in

When you are planning on investing your money, you first need to make sure that the platform has a very good Index Services. It is not always possible to know such details, especially if you are not a part of the field. Thus it is advocated that you get a good professional to step in and help you with the same. There are many good professional out there who have a sound knowledge regarding the strategies that are required to make investments in platforms with good Equity Index.

Services offered by a professional

A professional will be able to help you find the perfect platform for your investments. Once you know the best platform you can go ahead and have them create a platform for you. Once the platform is created you can easily invest your savings in it. But does that mean that they will only create it for you? Thankfully, no. If you have hired their services then they will be managing your services as well. They will be in charge of your portfolio and help you to earn through it. In lieu of their services, they will be charging a fee for the same.

Thus it is a very good idea to appoint a professional to create and manage your portfolio when you plan to invest your money.

Source : https://storify.com/thematicinvest/know-what-you-invest-in

Find the best custom index from professionals

When you are investing your hard earned money in different kinds of platforms, there is always the tension of losing part of your savings. Investing money can be a gamble if you do not know the correct ways to do it. One of the biggest thing about investing money is that you need to have a very good idea regarding the market scenario. Unless you are well versed with the technical terms like Total Return Indices you are bound to have a very difficult time and even end up losing money. So it is highly recommended that you get you get a professional to manage your Custom Index.

Investing in the preferred platform

When you are visiting a professional, they will help you choose the exact platforms in which you can invest. There are many different platforms that you can invest in. But not all of them will be a good option for you. You need to make sure that you are choosing the correct option if you want to get high returns with the help of Dividend Index. Now the important thing is that when you get a professional, they will be able to help you find the different platforms that will help you to get high returns on the investments but at low risk.

How to get a professional?

There are many different companies who will offer you the services of professionals who can help you with the same. You can easily go online and look through the different options. Once you have gone through the options you will get a good idea regarding the different options available for you. You can read the different reviews available there to know whether they will be a good option for you. The professional needs to have a clear idea regarding the strategies that will help them to handle your money.

Investing money in these different platforms is a very good thing that you can do in order to save money. When you are investing money you are not only saving a part of your income but also earning from that saved part in the form of dividend.

Source : http://thematicinvestings.blog.fc2.com/blog-entry-4.html