"Randy" <john.public1[at]comcast.net> wrote
- quote -

Not purely, no. Googling turns up descriptions of the S&P 500 like the
following: "Most of the companies in the index are solid mid cap or large
cap corporations."

www.morningstar.com , under "Portfolio" for a specific fund, states right
now that Vanguard's famous S&P 500 index fund (VFINX) and Fidelity's
equivalent (FSMKX) are each about 10% mid-cap and 90% large/giant cap.

- quote -

is 0.98 .

For a graphic that makes this point, see

http://finance.yahoo.com/q/bc?t=my&s...=vfinx%2Cfsmkx

- quote -

I wouldn't say this.

Probably the only real difference between the index funds with
brokerages of the quality that you list is the expense ratios of the
funds. Among the three that you list, I would choose the one with the
lowest expense ratio. Relative NAVs are utterly meaningless.

One suggestion (depending on the diversification of rest of your
portfolio), look at a total stock market index fund rather than an S&P
500 fund. S&P based indexes are purely large-cap funds and are
somewhat vulnerable to companies being added/dropped from the index,
which is a decision made from time-to-time at the sole discretion of
Standard & Poors. A total stock market index (like Vanguard's VTSMX)
naturally includes small cap stocks, weighted based on their market
capitalization. Generally, these funds track the Wilshire 5000. Since
it does not arbitrarily cut off at 500 stocks, shifts in the large cap
index have essentially no effect on the overall value of the index.
Hope that helps. Good luck.
Randy

"s o" <jou128[at]yahoo.com> writes:

- quote -

No. The share price of open-end mutual funds relative to each other
is completely meaningless. There's no supply and demand operating.
The funds create and destroy shares each day to meet the day's net
purchases/redemptions. So if people find a fund attractive and send
money in, it's not going to budge the share price at all. The fund
will just issue more shares (at the day's NAV). But even in the stock
market, the share price of a stock relative to that of another stock
isn't particularly meaningful, either.

If a mutual fund wanted to, it could do small splits and reverse
splits each day to keep its share price constant, and its shareholders
would still do just as well (or as poorly) as those of a fund that had
an identical portfolio but didn't do anything like that.

Remember, NAV is simply the net value of portfolio divided by the
number of shares.

Imagine two funds, each with a $20,000,000 portfolio. Fund A has
1,000,000 shares issued, so its NAV will be $20. Fund B has 2,000,000
shares issued, so its NAV will be $10. The value of each portfolio
now increases by 20% to $24,000,000. The NAV of Fund A will increase
from $20 to $24, a 20% increase. The NAV of fund B will increase from
$10 to $12, a 20% increase. If you had put $10,000 (500sh) in Fund A,
those 500sh are now worth $12,000. If you had put $10,000 (1,000sh)
in Fund B, those 1,000sh are now worth $12,000. No difference.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

s o wrote:
- quote -

SO,
You can ignore the NAV when deciding among different S&P 500 index
funds. It all comes out in the wash.

If you invest $1000 in a no-load fund with an NAV of $100 you'll get
10.000 shares worth $1000.

If you invest $1000 in a no-load fund with an NAV of $10 then you'll get
100.000 shares worth the same $1000. You have more shares, but each
share is worth less, so the total value of your investment is the same.

And if both are index funds that do a good job of tracking the
performance of the S&P 500 index, the total dollar-amount gains or
losses will be the same. If the index gains 5%, the $100/share fund will
gain $5/share, and the $10/share fund will gain $0.50/share. In either
case you'd end up with $1050.

-Tad

Hi,

I'm deciding which company to open my IRA, I pretty much know I want to
have some portion in a S&P 500 index. Everything else being equal, if
Vanguard's VFINX costs $108/share while fidelity's FSMKX costs only
$84/share, isn't it a better deal to go with fidelity, better yet,
Etrade's own S&P 500 index fund costs only around $10/share. If I'm
making constant periodic investments, I could get a lot more shares for
the similar thing, is my logic correct? Thanks.

S O