Index Tracker Funds

SavingStudent1

Hi everyone,

I was wondering, how do you profit from index tracker funds? Is it through the dividends you get from the companies in the funds, or is it through selling the fund at a higher value than what you've invested?

For example, suppose I plan to invest £500 a month into the S&P 500 Index, then if I leave it and check after 5 years, then how do I know if I have made a profit or if I can make one?

Is it by saying okay: I've invested £6000 a year, and e.g. random made up, £50 in fees, say in 5 years, I've invested a total of £30300, then if my fund is now worth more than that, then I can profit by selling it right? Is that the sort of profit method with this?

Thank you

herbily

It can be either - investment funds are often labelled "accumulation" or "dividends". If you invest with one of the online platforms they will have a dashboard that tells you at any point what your gains (or losses) are - and yes, the theory is you make a profit by selling the units you've invested in. There's a Youtuber called MamaFurFur who shows you screenshots from what she's investing in, which might help give you a better picture of how this works.

SavingStudent1

herbily said:

It can be either - investment funds are often labelled "accumulation" or "dividends". If you invest with one of the online platforms they will have a dashboard that tells you at any point what your gains (or losses) are - and yes, the theory is you make a profit by selling the units you've invested in. There's a Youtuber called MamaFurFur who shows you screenshots from what she's investing in, which might help give you a better picture of how this works.

Thank you so much, I'll take a look at her channel!

droopsnoot

Also might be worth looking the "Savings and Investments" section of this forum.