I don't think any of those funds are index funds, and I prefer index funds to actively managed funds, with the assumption we're dealing with reasonably well developed financial markets.Wd40 wrote:There are indian mutual funds which invest globally and quote in INR although underlying assets are not INR....
Understood. Getting a tax advantage is a very good reason to hold an asset, but you still have other factors such as diversification that are also important. I also assume that there are ways to manage tax burdens at least somewhat. For example, if there is a capital gains tax, but the tax is only owed when the capital gain is realized, then you can defer the sale of taxable assets and/or "mix" regular sales of taxable assets with regular sales of tax advantaged assets in order to keep the former within lower tax brackets. If you want to get really fancy there's also something called "tax loss harvesting," which means (if the tax code allows it) you sell some assets at a loss (or at a lower gain in a lower tax bracket) and reinvest those funds in something different enough to satisfy the tax code but similar enough for your continuing investment purposes. There are some trading costs to do that, but sometimes that technique makes sense, if legally permitted of course.However the tax treatment is different. These are taxed, while mutual funds which invest in Indian equities are exempt from taxes if they are held for more than 1 yr.
Many governments offer tax advantages only for their domestic companies -- that's pretty common. Singapore does the same thing through CPF and SRS. But I do not recommend holding only Singapore-headquartered company stocks and other Singapore-based assets, even if you never leave Singapore. That's at least a bit too risky for my tastes, even considering the tax breaks.
Vanguard is just a low cost, mutually owned (by its investors) manager. It offers numerous fund choices, so there's no "it" (singular) in terms of funds.PNGMK wrote:I don't know about Vanguard... I know people who are still negative in it from the 90's.
But sure, it's possible to lose money with even the best, lowest cost fund manager. For example, if you bought a Vanguard fund that invested solely or predominantly in NASDAQ stocks (U.S. exchange heavy with technology stocks), you bought that fund in one or a couple big payments at or near the peak of the "Dot Com" bubble, and then you did nothing else, then that asset might be worth less today than it was back then. But I didn't and don't recommend anything like that. That's not investing, that's gambling. Japan would be another example: if you had bad timing and made one or only a few purchases at or near the peak of that market, your asset would still be worth less today than it was in 1989.
Dollar (or rupee) cost averaging, long time horizons, well diversified holdings, and low total cost vehicles are all important success factors.