index fund is a kind of fund variety that can grow synchronously with the market based on the principle of fitting the target index and tracking the change of the target index. The investment of index funds adopts the investment strategy of fitting the return rate of the target index, and invests in the constituent stocks of the target index in a diversified way, so as to make the return rate of the stock portfolio fit the average return rate of the capital market represented by the target index. Index fund is an indispensable fund in a mature securities market. In western developed countries, like other index products such as stock index futures, index options, index warrants, index deposits and index bills, it is increasingly favored by various institutions including exchanges, securities companies, trust companies, insurance companies and pension funds.
an index fund is a fund that ensures that the performance of the securities portfolio is similar to that of the market index. Operationally, it is the same as other funds. The difference between index funds and other funds is that it tracks the performance of stock and bond markets and follows a stable strategy. Its advantages in the securities market include not only effectively avoiding unsystematic risks, low transaction costs and delaying tax payment, but also the characteristics of less monitoring investment and simple operation. Therefore, in the long run, its investment performance is better than other funds.
index fund is a kind of fund that constructs a portfolio to invest in securities according to the principle of compiling securities price index. Theoretically speaking, the operation method of index fund is simple, as long as you buy a corresponding proportion of securities according to the proportion of each kind of securities in the index and hold it for a long time.
For a purely passively managed index fund, the fund turnover rate and transaction cost are relatively low. Management fees also tend to be minimal. This kind of fund will not invest too much money in certain securities or industries. It will generally keep full investment without market speculation. Of course, not all index funds strictly meet these characteristics. Different index funds will also adopt different investment strategies.
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In June 22, only half a year after the SSE launched the SSE 18 Index, the Shenzhen Stock Exchange also launched the SZSE 1 Index. After that, the first domestic index fund-Huaan SSE 18 Index Enhanced Securities Investment Fund came into the market. In early 23, another fund closely tracking the trend of SSE 18 Index-Tiantong SSE 18 Index Fund was also listed and issued.
However, the development of index funds in China is not smooth sailing. In order to avoid systematic risk and individual stock investment risk, China's optimization index funds adopt different operating principles from those of foreign index funds. The main differences are as follows: the managers of domestic optimized index funds can adjust the indexed positions according to the judgment of the index trend, and in the process of subjective stock selection, they use the advantages of research and financial analysis to prevent some risky stocks from entering the portfolio. In the part of indexed investment, funds Xinghe and Jingfu track the Shanghai A-share composite index, while fund Pufeng tracks the Shenzhen A-share composite index. Judging from the actual operation results of such funds, the performance is not satisfactory. To explore the reasons, there are not only the defects of China stock market itself, but also the operational reasons of fund companies. Nevertheless, index funds have become a favorite financial tool for many investors. With the continuous improvement of China's securities market and the vigorous development of fund industry, it is believed that index funds will have great development potential in China.