What is a Global Index Fund?
A global index fund contains a basket of thousands of company's stocks from all over the world in all different sectors.
The stocks within an index funds are invested into based on how big they are which is measured by what is known as a company's its market capitalisation (number of shares x price). This is also commonly referred to as a company's market cap.
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This is key because nobody chooses what company's to invest in. When you invest in an index fund you are investing into a slice of each company within the fund. As mentioned above, some slices are bigger than others, and you will be more invested into some companies than others.
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Essentially the bigger a stocks market capitalisation the bigger its holding will be within the index fund. For example,
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Index (passive) funds essentially try to mirror various market indexes to provide investors with the average market return. Index funds do this by holding all of the stocks in the index its tracking.
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