Part 6/7:
While low fees make index funds an appealing option, it’s a mistake to focus solely on fund costs. The rise in index funds has created a landscape where many funds compete to present themselves as the 'cheapest option.’ However, this should not be the only consideration.
Several vital factors should be evaluated, such as:
Fund Size: Larger funds might provide more liquidity, making it easier to buy or sell your investments.
Replication Method: Understanding whether the fund uses physical or synthetic replication can impact performance and risk.
Domicile of the Fund: The country where the fund is based can influence your tax obligations and other benefits.
By assessing these elements, you can make informed decisions beyond just chasing the lowest fees.