Advantages of enhanced index funds: Enhanced index investment Because different fund managers describe the investment purpose of their index-enhanced products differently, there is no unified model for enhanced index investment. The only similarity is that they all want to provide investment performance above the target index return level. Each fund manager has different strategies to "challenge" the index, usually using quantitative strategies and different arbitrage methods to obtain higher returns. And when there are risks in the market, it is necessary to actively adjust the fund positions to avoid some risks, which is impossible for pure index funds.

Disadvantages of enhanced index funds: Compared with passive index funds, enhanced index funds have greater flexibility in investment. Use the method of quantitative investment to pursue the excess return that the index performance exceeds the index. Compared with passive index funds, the tracking error is bigger. The soul of enhanced index funds lies in the ability of fund managers, and the costs brought by market rotation and artificial stock exchange also need to be borne by investors themselves, so their costs are high.

There are more and more index funds in the market, and it is more and more difficult to choose index funds. Investors should pay more attention to two points when choosing index funds: on the one hand, finding such an index is as difficult as choosing stocks; On the other hand, choose index funds with smaller investment tracking errors. The smaller the tracking error of funds, the stronger the management ability of fund managers, and the more investors can achieve the goal of obtaining index returns.

According to the data of Galaxy Securities Fund Research Center, by the end of April 20 12, there were 133 standard index funds and 24 enhanced index funds in the domestic fund market, which was unprecedented in scale. In the face of numerous index funds, how should investors choose?

1, pay attention to the strength of fund companies-fund comes first

When choosing any fund, the strength of the fund company should be the primary factor that investors pay attention to, and index funds are no exception. Although the index fund is a passive investment, the operation is relatively simple, but tracking the underlying index is also a complex process, which requires accurate calculation and rigorous operation process. Powerful fund companies can usually track the underlying index more closely.

2. Pay attention to fund fees-cost wins.

Compared with actively managed funds, one of the advantages of index funds is low cost, but different index funds have different degrees of "low cost", so it is very necessary to minimize the investment cost. Of course, it should be noted that lower fees are important, but the premise is that the fund has good returns. Don't blindly choose index funds for lower fees.

3. Pay attention to the target indicators-the most important.

The core of index fund lies in the index it tracks, so it is particularly important to know the corresponding market when choosing index fund. In addition, investors can also achieve the purpose of asset allocation by investing in different index funds.

At present, there are many kinds of indexes in the domestic market, which can be described as "a hundred flowers blossom and a hundred schools of thought contend". Different indexes cover different markets and have different risk-return characteristics, such as Shanghai Stock Exchange 180 and Shenzhen Stock Exchange 100 index, which reflect the situation of Shanghai and Shenzhen stock markets respectively. CSI 100 and SME index reflect the situation of blue-chip enterprises and SMEs in Shanghai and Shenzhen stock markets respectively. Even with the launch of cross-border ETFs, it is a good asset allocation direction to choose the Shanghai and Shenzhen 300 index funds and funds investing in overseas market indexes at the same time, which can play a role in diversifying investment and risks to a certain extent.