High Growth Index Funds With No Load

During recessionary times when the GDP contracts, stock markets tend to go in tandem and drop in value. During years when the GDP grows, however, does not necessarily portend a rise in stock prices interestingly. In any case, the drop in stock equities causes many to scramble for new places to put their money. Preferably, these new investments should be low risk, no fee (such as no load index funds), and give high yield. It is not always possible to hit all three attributes so two out of three are acceptable to many.

As would be expected, high yield mutual funds are offered by regular physical and online brokerages. One point to note is that the low cost (sometimes known as no load) index funds spend as little money as possible on the talent of the fund manager, preferring instead to adhere to a trading philosophy guided more strictly by performance averages and historical yields. Loaded index funds work differently in that the manager makes many decisions buying, selling and holding a mix of stocks. The manager is usually compensated well.

Another place to find index fund-like financial products is a brokerage that offers ETFs (or exchange traded funds). Regular mutual funds are bought once during the day and have a value that settles in at the total value of underlying assets. ETFs however behave much like stocks in that they are traded on the exchange constantly. Unlike mutual funds, there is no minimum limit to how much one needs to put up to get an account. IRA-linked mutual funds are similar to ETFs in that they have low minimums.

There are a few other possibilities for savvy investors other than high yield mutual funds in trying financial years.

Checking and savings accounts infrequently offer the best available yields encouraging investors to turn elsewhere. Undoubtedly investors will encounter the money market account that are similar to typical bank accounts but offer more lucrative rates. Investors who are concerned about the reliability of online banks should be comforted as long as the banking institution is licensed, it is insured by the FDIC in the event of a serious collapse. Money market accounts must not be confused with a money market fund which invests in a portfolio of such instruments, and accordingly are not federal government insured.

A less appreciated gem in the financial world is the GNMA mutual fund, frequently eclipsed by the related companies Fannie Mae and Freddie Mac. All three manage real estate loans but Ginnie Mae funds are thought to be the most conservative. In the time of the home loan meltdown of 2007-2008, when Fannie Mae and Freddie Mac were lambasted due to their part in taking on the risks of underqualified home buyers, Ginnie Mae emerged largely undamaged because of extremely low-risk investments. Not all mutual funds can title itself a Ginnie Mae fund. Only those that have more than 80% share of assets in GNMA securities are allowed.

If the government conducts its activities it needs to in some way finance the operations enough taxes are collected to reward employees. Temporarily obtaining money at these amounts is carried out with the help of the sale of bonds, which are basically IOUs by the government to pay back plus interest. The general masses buy into bonds for hitherto has been a highly ironclad promise of repayment and lack of default risk. No load index funds with bonds as the primary asset are available too.