Phoebe Loosinhouse
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Wed Sep-17-08 07:58 PM
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Ok, for the big financial brains here - what about the "branded" mutual funds? |
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If xyz insurance company and brokerage go down the tubes, would xyz S&P index mutual fund also go down the tubes?
Is the fund's well-being tied to the well-being of their creator and host or are they stand alone entities that are separate from their hosts and namesakes?
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Rage for Order
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Wed Sep-17-08 08:06 PM
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1. Generally speaking, no |
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The shares of stock that a mutual fund purchases on your behalf are held in a trust, so you'd still have your stock. Unless, of course, your mutual fund was largely invested in shares of the mutual fund company that failed. An index fund tracks a stock exchange index, e.g. S&P 500, the NYSE, Nasdaq, Nikkei, or other index. The shares are mathematically weighted to represent the index as a whole. For example, let's say the NYSE has a total value of $100, and the total market capitalization (# of shares outstanding x share price) of Microsoft is $2. This, of course, would equal 2% of the total of the NYSE. Your index fund would put 2% of its assets into Microsoft to reflect this. The holdings are re-weighted at regular intervals to track the overall index as closely as possible.
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Sun May 05th 2024, 09:10 PM
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