Index funds generally refer to index funds, that is, funds that invest in index stocks, with the goal of obtaining roughly the same rate of return as the index. Simply put, it bought not a single stock, but a basket of stocks to track the corresponding index.

According to the purchase strategy, index funds can be divided into passive index funds and enhanced index funds: the former completely copies the index and buys whatever stocks the index contains; Most of the latter assets copy the index, and a small number of assets actively invest. This determines that the rate of passive index funds is lower (just keep an eye on the index and don't need to change positions frequently), while enhanced index funds are relatively flexible.

operational approach

Index fund is a kind of fund that constructs a portfolio for securities investment according to the principle of compiling securities price index. Theoretically speaking, the operation method of index fund is very simple, as long as you buy the corresponding proportion of securities according to the proportion of each securities in the index and hold it for a long time.

Related abstract

For purely passively managed index funds, the capital turnover rate and transaction cost are relatively low. Management fees are often very small. Such funds will not invest too much money in certain securities or industries. Generally, full investment will be maintained, and there is no market speculation. Of course, not all index funds strictly meet these characteristics. Different index funds will also adopt different investment strategies.