What does passive fund mean?
Passive funds (usually index funds) generally choose specific index stocks as investment targets, trying to replicate the performance of the index, rather than actively seeking to surpass the market.
How to choose passive funds;
1. Composite Index Fund
(1) Features: This kind of fund is the most common and typical index fund. Its tracking index basically reflects the ups and downs of the whole market, which is very representative of the market and holds very scattered stocks.
(2) Representative indexes: CSI 300, CSI 500, CSI 100, GEM index, SSE 50, etc.
2. Industry index funds
(1) Features: As the name implies, the fund's tracking index is an industry index, which only reflects the ups and downs of this industry. Because the industry classification standards are not exactly the same, such as the CSRC industry classification, Shenwan industry classification, GICS classification and so on. And the index compilation method is different, even if the same industry is tracked, the fund performance will be different.
(2) Representative index: the name of the index includes but is not limited to financial real estate, medicine and health, food and beverage, non-ferrous metals, energy, information technology, etc.
3. Concept index fund
(1) Features: Generally, such funds are generated according to some hot topics or certain policy expectations. It tracks not one industry, but several industries, and the difference between them is even greater.
(2) Representative index: The name of the index includes but is not limited to military industry, environmental protection, emerging industries, Belt and Road, state-owned enterprise reform, health and low-carbon economy.