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.
Who are the buying groups of index funds?
(1) I want to share the fruits of China's economic and stock market development, but I don't have much time to pay attention to stocks and many investors who actively invest in stock funds;
(2) investors who have certain risk tolerance and hope to obtain average market returns for a long time;
(3) Small and medium-sized investors want to invest in some high-quality stocks and listed companies to form a high-quality portfolio, but they don't have much professional ability in stock selection and timing;
(4) Investors who are more concerned about investment costs and want to choose low-cost fund products;
(5) Index funds are the best choice for long-term investors to make fixed investment in funds.
How to buy index funds?
First of all, we need to see clearly the target tracked by index funds. The investment goal of index funds is to obtain the rate of return of the underlying index. Therefore, choosing a suitable index is the key to investing in index funds. There is no good or bad index, the most important thing is to adapt to your own asset allocation goals. For example, if you want to invest in small and medium-sized enterprises, you can choose small and medium index funds; If you want to invest in a certain industry, such as financial real estate, then the corresponding industry index fund is the main choice. For most investors who are optimistic about the market trend for a long time and want to share the fruits of economic development through index funds, they can choose a representative mainstream index.
Second, carefully consider the rate of each fund. The rates here include fund management fees, custody fees and subscription redemption fees. Although the first two items do not require investors to pay out of their own pockets, they should not be underestimated as expenses included in the fund assets. Generally speaking, ETF and LOF index funds have lower rates. Before choosing an index fund, investors should carefully read the fund contract and prospectus to understand the product characteristics and rate level.
Generally speaking, you can buy index funds through the following channels: 1. Go directly to the bank counter to buy; 2. Go to the online trading system of the bank to buy and sell funds; 3. Through securities company transactions, you can entrust fund transactions by telephone at the brokerage office; 4. Trading on the fund company's website can be entrusted for 24 hours, unlike buying in a bank, which is limited by trading time; 5. If it is ETF or LOF index fund, it is more convenient to buy and sell in the secondary market like stocks. Generally speaking, it is better to buy a fund in a bank than on the fund website, because the handling fee of the bank is too expensive. If you are familiar with the network, it is recommended to buy it on the fund sales platform, which is simple, convenient and economical (half cheaper than the bank).
Before buying an index fund, you should be clear about your investment objectives so as to choose the type of index fund you want to invest in, and then carefully consider the rate of each fund, and you can't ignore the investment cost. In the way of subscription, we should also weigh the advantages and disadvantages to save time and money for our investment.