Wide fund refers to a broad-based index fund whose constituent stocks are mostly large-cap stocks, while narrow fund refers to a narrow-based index fund whose constituent stocks are mostly stocks other than large-cap stocks. Generally, narrow funds will fluctuate greatly, which will also lead to high risks and high returns due to the influence of their index composition. The wide fund is relatively stable, because the constituent stocks of its index are large-cap stocks, which makes the wide fund rarely fluctuate greatly.

The difference between broad-based index funds and narrow-based index funds

1. The single stock weight of a broad-based index fund does not exceed 30%, and the total weight of five stocks does not exceed 60%, while the stocks of a narrow-based index fund are generally constituent stocks, and the index is also an industry stock index;

Generally speaking, companies with broad-based index funds will be richer, involving multiple stocks and industries. The narrow base index gold industry is relatively concentrated;

3. Broad-based index funds are suitable for people with low risk tolerance, because broad-based index funds cover a wide range and are relatively stable. However, the risks and benefits of narrow index funds are very high.