Home

Money

Stocks

Mutual Funds

Bonds

Retirement

401(k)/403(b)

Research

Clients

America's Fastest Growing Independent Financial Advisory Network
A Nationwide Network of 100% Independent & 100% Objective Fee-Only Financial Advisers

Picture of The-Adviser The-Adviser.com The place to come for answers™
Explain the difference between Spiders & index funds?
By The-Adviser.com -
  

SERVICES
Money Management
Portfolio Reviews
401(k) Rollovers
Retirement

Financial Plans
Estate Plans
College Savings
Clients Only

WHY US
Benefits
Available Services
"Interview Us"
Fee Information
Disclosures
Applications

Clients Only

THE COMPANY
Background
Philosophy
The Press
Policies

Opportunities

LINKS
Home Page

Related Links

Stock Quotes

New York - Some investors believe that index investing (investing in mutual funds that track specific market indices) are the most cost efficient investment strategies. Index mutual funds have low management fees and low turnover because they don't change unless the underlying index adds or subtracts a new stock.

Spiders are an alternative to index mutual funds. Spiders standard for "Standard & Poor's Depositary Receipts." Spiders in essence represent a trust that own the stocks of the S&P and are designed to be worth one-tenth of the daily quoted value of the S&P 500. They trade on the American Stock Exchange under the symbol SPY.

The following are the major differences between Spiders and Index funds?

  • Liquidity - Spiders can be purchased any time during the day at the immediate market price. Spiders also can be purchased with stop or limit orders. Index funds can only be purchased or sold at the closing price the day you buy or sell it.

  • Dividends - Spiders pay dividends from stocks held on scheduled quarterly payout dates; hence, investors can't reinvest the proceeds immediately. In addition, Spiders do not automatically reinvest dividends as you can for free with most index mutual funds.

  • Expenses - Management fees are generally comparable for Spiders and Index funds.

  • Commissions - Spiders require a commission to buy or sell while most index funds can be purchased for no transaction fee.

  • Minimum Investments - Although some index funds require minimum investments, Spiders can be purchased in any lot size.

  • Short Selling - Spiders can be used for short-selling with no up-tick rule; hence, you do not need to wait for an up-tick in price to sell them.

Given the fact that Spiders are more complex investments to understand - most investors considering index investing should stick with index-based mutual funds.

About Us
The Independent Adviser Corporation is a 100% Independent and 100% Objective Financial Advisory Firm that writes buy-side investment research. Our network of independent Fee-Only Financial Advisers serves individuals, families and businesses. They provide financial planning services, tax advice and offer professionally managed asset accounts. They do not underwrite corporate securities nor do they sell any proprietary products. To find out more or get a FREE consultation Ask The-Adviser.com or call 1-800-ADVISER.

 

In Association with Amazon.com


Your Independent Fee-Only Financial Adviser can review your stock option plan and help you determine an overall strategy.


Got an investment question?
Ask The-Adviser.com

Open a professionally managed account:

  • Brokerage Accounts
  • Traditional IRAs
  • Roth IRAs
  • 401(k) IRA Rollovers
  • 403(b) IRA Rollovers
  • College Savings
  • Retirement Savings

Hire The-Adviser.com

Click here for our Top Ten Investment Picks

Financial Advisory Services
Money Management
Retirement Planning
Portfolio Reviews
401(k) Rollover Assistance
College Savings
Financial Plans

In Association with Amazon.com

You don't need to be rich to hire a Financial Adviser. Just Smart

The Independent Adviser Corporation is a Registered Investment Adviser that specializes in helping individuals, families and businesses develop investment and financial planning strategies.
Click here to learn more about our Fee-Only services

Do you have a question about your investments?
Ask The-Adviser.com

Please visit our sponsors.
Click Here to Visit our Sponsor

1-800-ADVISER
America's Independent-Adviser.

Copyright.  The Independent Adviser Corporation.  All rights reserved. Important Legal Information