Index funds, as the name implies, are fund products with specific indexes (such as Shanghai and Shenzhen 300 Index, S&P 500 Index, Nasdaq 100 Index, Nikkei 225 Index, etc.) as the target. ) as the underlying index, and take the constituent stocks of the index as the investment object, build a portfolio by buying all or part of the constituent stocks of the index, and track the performance of the underlying index. Generally speaking, the index fund aims to reduce the tracking error, make the change trend of the portfolio consistent with the underlying index, and thus obtain roughly the same rate of return as the underlying index.

There are four types of index funds.

Closed index fund. Can be traded in the secondary market, but can not purchase redemption;

Ordinary open index funds. Can not be traded in the secondary market, but can be purchased and redeemed;

Index ETF fund. ETF can be traded in the secondary market, and can also be purchased and redeemed, but the purchase and redemption is in the form of portfolio securities;

Index LOF fund. It can be traded in the secondary market, or it can be purchased and redeemed.

There are more and more index funds extending the information market, and it is more and more difficult to choose them. Investors should pay attention to two points when choosing index funds.

Choosing a fund that tracks the growth of the index is as difficult as choosing stocks.

Choosing index funds with small tracking error shows that the stronger the management ability of fund managers, the more investors can achieve the purpose of obtaining index returns.

Refer to Baidu Encyclopedia: Index Fund