What does the index fund mean in 221 _ What are the index funds

For investors, the investment methods provided by index funds are more convenient and simple. The so-called index funds are all a reflection of the market trend. However, there are still many people who don't understand what an index fund is, so what is an index fund? What is the meaning of the index-based fund in 221 collected by Xiaobian? What are the index-based funds? I hope I can help you.

what is an index fund

an index fund is a fund that tracks a certain target index in the securities market. Domestic index funds were born in a short time, and the number is small, and investors' awareness of index funds is relatively low. However, the performance of index funds has aroused widespread concern. Especially since 219, the overall rate of return of index funds has exceeded that of other types of funds actively managed, among which SZSE 1 has the best performance, and E Fund's net growth rate of SZSE 1ETF ranks first among index funds, and ranks before the rate of return of all funds.

The index is generally the most representative stock portfolio in the market, which fully reflects the national macroeconomic development. In the environment of China's GDP maintaining rapid growth and the profits of listed companies rising sharply, index funds can fully share economic growth and bull market rise.

Is the index fund risky?

There are two main risks of index funds: the risk brought by high positions. For investors, the stock of index funds usually accounts for no less than 9% of the fund's net assets, which determines the high returns of index funds. Compared with the partial-stock fund with a stock allocation ratio of 6%, once the market enters a unilateral decline, the index fund selected by investors will suffer more losses. In the wealth management market, the losses caused by high positions are even more amazing. The reason for this situation is that index funds have high positions, and fund managers can't avoid the risk of the stock market through operations.

For investors, although there are many classifications of index funds, the overall risk of fund redemption fluctuates according to market conditions. If the risk tolerance is low, invest in some indexes including large-cap blue chips, invest in small and medium-sized boards and growth enterprise market in pursuit of higher returns, and invest in an industry index if you are optimistic about it. If you don't like fixed investment, it's also good to do band through index funds. This varies from person to person, and it will be miserable if the band is not well controlled. It is suggested that it is not necessarily fixed at 3 per month. If the index is low, you should invest more, and if the index is high, you should not invest or even redeem it.

what are the index funds?

1. Large-cap index funds. 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. Industry index funds. The tracking index of this fund is the index of a certain industry, which only reflects the situation of this industry. For example, there are CSRC industry classification, Shenwan industry classification, GICS classification, etc., and the methods of compiling the index are also different, so even if the same industry is tracked, the fund performance will be different.

3. Thematic index funds. This kind of fund generally comes into being according to some hot topics or a certain policy expectation, and it is not a certain industry but involves several industries.

what is the fixed investment of index funds?

Fixed investment of index fund refers to the abbreviation of fixed-term investment fund, which means to invest a fixed amount (such as 5 yuan) in a designated open-end fund at a fixed time (such as the 8th of each month), similar to the bank's deposit and withdrawal method. What people usually call funds mainly refers to securities investment funds.

besides the fixed investment of index funds, there are other types of funds, but they are not as suitable as index funds. The main reasons are as follows:

1 index funds passively simulate the index, which does not require additional analysis by fund managers and has lower management costs. The basis of profit from fixed investment is to enjoy the systematic profit of the stock market, not the profit from timing. Investing in index funds can better meet the purpose of systematic profit, and the subscription fee and management fee of index funds are lower than those of active funds.

2 The fund actively managed is greatly influenced by the personal factors of the fund manager, who is a highly mobile profession. Every time a fund manager is changed, even if the investment level has not dropped, it is always necessary to switch positions and exchange shares according to the preferences of the new manager, thus increasing unnecessary losses. Once the index selection criteria for constituent stocks are set, they rarely change.

3 A stock or an industry may decline for a long time. But the index won't. According to the market changes, the index will bring out the stocks that are deserted and abandoned by the market, and bring in the active and representative fresh blood, and keep this metabolism.

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