The difference between fully replicated index funds and enhanced index funds;
1. Completely copied index fund: This is an index fund in the full sense, that is, it completely copies and tracks the trend of the index. This index fund is only configured and adjusted according to the constituent stocks of the underlying index and their weights. Although it will deviate from the actual index trend because of the change of investment ratio, the gap is very small, so it can be said that the probability of exceeding the index is very small. Therefore, this kind of fund has the highest degree of conformity with the index.
2. Enhanced index fund: This is to actively invest a certain proportion of fund assets while tracking the underlying index, so as to obtain income beyond the underlying index. This kind of fund has great flexibility in investment. In addition to aiming at the index, we can also do some intensive investment, which increases the variables relative to the index, which may bring investors a return higher than the index rate of return, or may cause the actual rate of return to be worse than the index.
3. If the active investment is done well, the enhanced index fund will surpass the replicated index fund. But if active investment is not done well, the situation is just the opposite.
classify
According to different standards, funds can be divided into different types:
(1) According to whether the fund unit can be increased or redeemed, it can be divided into open-end funds and closed-end funds. Open-end funds are not traded on the market (as the case may be), but are purchased and redeemed by banks, brokers and fund companies, and the fund scale is not fixed; Closed-end funds have a fixed duration and are generally listed and traded on the stock exchange. Investors buy and sell fund shares through the secondary market.
(2) According to different organizational forms, it can be divided into corporate funds and contractual funds. A fund is established by issuing fund shares to establish an investment fund company, which is usually called a corporate fund; The establishment of fund managers, fund custodians and investors through fund contracts is usually called contractual funds. China's securities investment funds are all contractual funds.
(3) According to the different investment risks and returns, it can be divided into growth funds, income funds and balanced funds.
(4) According to different investment objects, it can be divided into stock funds, bond funds, money market funds and futures funds.