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Author: ncg2 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 39312  
Subject: NASDAQ Index Fund??? Date: 1/17/1999 3:08 PM
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Does anyone know if there is such a thing as a NASDAQ Index Fund?
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Author: EdMcDowell Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 568 of 39312
Subject: Re: NASDAQ Index Fund??? Date: 1/18/1999 2:15 AM
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Does anyone know if there is such a thing as a NASDAQ Index Fund?

There is no such fund.

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Author: Nizac One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 570 of 39312
Subject: Re: NASDAQ Index Fund??? Date: 1/18/1999 9:01 AM
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Does anyone know if there is such a thing as a NASDAQ Index Fund?

Rydex OTC http://www.indexfundsonline.com/profiles/RYOCX.html (NASDAQ 100)

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Author: EdMcDowell Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 571 of 39312
Subject: Re: NASDAQ Index Fund??? Date: 1/18/1999 6:37 PM
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Does anyone know if there is such a thing as a NASDAQ Index Fund?

Rydex OTC http://www.indexfundsonline.com/profiles/RYOCX.html (NASDAQ 100)


I didn't mention this fund because I do not consider it to be an index fund. It calls itself an index fund, which is fine, but that does not make it true. What separates this "index" fund from index funds such as VFINX and VTSMX?

RYOCX utilizes the following strategies: options, futures, and market-timing. VFINX/VTSMX do not.

RYOCX has a turnover of (gulp!) of 972%! VFINX and VTSMX has turnovers of ~5%. As a result of these disparities in turnover (which causes capital gains distributions), VFINX/VTSMX are very tax-efficient, and RYOCX is not.

RYOCX has an expense ratio of 1.33%, while VFINX/VTSMX has expense ratios of 0.20%. One of the main reasons why index funds outperform actively managed funds is low expenses. RYOCX's expenses are comparable to actively-managed funds.

Given all these differences, I think it is clear that RYOCX is an actively-managed fund, that will likely beat the pants of the NASDAQ 100 index when it is rising, and suffer even more when the NASDAQ 100 is falling. RYOCX has high costs, high turnover, and uses derivatives (options and futures) to implement market-timing strategies. For this, I repeat my assertion that this is not an index fund. Investors who want all of the excellent characteristics associated with index funds -- low costs, excellent performance, moderate risk, tax-efficiency -- should avoid this fund like the plague.

Also, RYOCX has a minimun investment of $25K.

Happy Investing!

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Author: rickisme Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 572 of 39312
Subject: Re: NASDAQ Index Fund??? Date: 1/18/1999 9:16 PM
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Does anyone know if there is such a thing as a NASDAQ Index Fund?

There will be a Nasdaq100 spyder coming out soon offered by AMEX/NASDAQ. It will trade just like a stock and you can short it on a downtick. It is expected to be offered early this year.

Rick

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Author: Nizac One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 574 of 39312
Subject: Re: NASDAQ Index Fund??? Date: 1/18/1999 10:17 PM
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I didn't mention this fund because I do not consider it to be an index fund.

I am, for the most part, in agreement with you on this point. But since it is the closest thing to one that I am aware of, I thought I would mention it.

RYOCX utilizes the following strategies: options, futures, and market-timing. VFINX/VTSMX do not.

According to the prospectus for RYOCX it "invests principally in securities of companies included in the NASDAQ 100 Index". Where did you read that it employs "market-timing" as an investment strategy? But you are right to point out that it may invest in other than just the index securities. http://www.rydexfunds.com/individual/fund_info/index.html

However, I wouldn't totally agree that the use of options and futures immediately disqualifies a fund as an "index" fund. For example, the new Waterhouse DOW 30 index fund (WDOWX) prospectus mentions that it may invest in "Equity Equivalents", which among other things it defines as including "stock index futures contracts". But I consider this an index fund. http://www.waterhouse.com/djif/

Also, the Vanguard Total Stock Market index fund (VTSMX) doesn't (obviously) invest in all the stocks in the target index. Instead, according to the prospectus "Using a sophisticated computer program, each Portfolio selects stocks that will recreate its target index in terms of industry, size, and other characteristics". http://www.vanguard.com/catalog/lit/download_prosp.html

RYOCX has a turnover of (gulp!) of 972%! VFINX and VTSMX has turnovers of ~5%. As a result of these disparities in turnover (which causes capital gains distributions), VFINX/VTSMX are very tax-efficient, and RYOCX is not.

Ouch! Yes, in total agreement with you on this point. Although this is at least in part attributable to the increased volatility of the respective benchmark index. See for example, http://www.nasdaq.com/reference/sn_ndq100_annual.stm

Given all these differences, I think it is clear that RYOCX is an actively-managed fund, that will likely beat the pants of the NASDAQ 100 index when it is rising, and suffer even more when the NASDAQ 100 is falling

Whether or not RYOCX is actively managed, I don't agree that this implies it will beat the index while the latter is rising and lose to it while falling. In fact, if you go to http://www.bigcharts.com/ and chart RYOCX against IXO for the last 5 years you'll find they have tracked remarkably well. Not as good as VFINX and the S&P 500 perhaps, but still well.

RYOCX has an expense ratio of 1.33%, while VFINX/VTSMX has expense ratios of 0.20%.

I am in total agreement that the expense ratio is high, and that this is an important point.

Also, RYOCX has a minimun investment of $25K.

Yes, and there are no exceptions for IRA investors, unlike many other index funds. But if you have the money to invest, then I don't think high minimum investments should deter anyone.

One final point. If the original poster was looking for an index fund that tracks the Nasdaq Composite, rather than the Nasdaq 100, then none of this will have been very helpful :)

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Author: CJake Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 585 of 39312
Subject: Re: NASDAQ Index Fund??? Date: 1/22/1999 9:50 AM
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Yes there is, Its symbol is WWIFX and has a $25k minimum and 2.5% load.

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Author: CJake Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 586 of 39312
Subject: Re: NASDAQ Index Fund??? Date: 1/22/1999 9:52 AM
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It isn't really a TRUE index fund, They use Options, Shorts, etc.

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Author: Nizac One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 588 of 39312
Subject: Re: NASDAQ Index Fund??? Date: 1/22/1999 1:19 PM
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ncg2 wrote Does anyone know if there is such a thing as a NASDAQ Index Fund?

to which CJake replied Yes there is, Its symbol is WWIFX and has a $25k minimum and 2.5% load

WWW Internet Fund (WWIFX) is a mutual fund designed to "invest specifically in the stocks of companies building and developing the Internet and World Wide Web." (from Fund Overview)

It is neither an index fund, nor specific to the NASDAQ. For example, it holds Texas Instruments (NYSE:TXN).

Furthermore, it is a no-load fund with a $1000 minimum ($250 in an IRA).

Were you perhaps thinking of a different fund?

http://www.internetfund.com/



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Author: drbobco One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 593 of 39312
Subject: Re: NASDAQ Index Fund??? Date: 1/26/1999 8:08 PM
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An alternative to S&P500 Index funds are units of S&P 500 Depository Receipts or SPY shares, which trade like stocks, avoid capital gains, etc. Is there a corresponding trust whose shares mimic the Nasdq100. Since the Nasdaq 100 is market cap weighted (now a modified market cap weighted index: see www.nasdaq.com/reference/sn_ndq100_annual.stm). I've heard such a product will be available, but cannot seem to find it.

Thanks.

drbob

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Author: LLLLLL Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 640 of 39312
Subject: Re: NASDAQ Index Fund??? Date: 2/3/1999 12:37 PM
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Does anyone know any details about the "Nasdaq GOLD" index share product thats coming out? Its supposed to work like a spider or diamond, with about the same fees, will invest in the Nasdaq-100. Any opinions on this? Looks like a great way to invest in the Nasdaq-100 stocks. I looked on nasdaq site off of www.amex.com and can only find a news release. Does anyone know any details?

Rich

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