Index funds invest in sample stocks of a stock market index, and build a portfolio by buying some or all sample stocks. The purpose is to make the fluctuation trend of the fund basically consistent with the index and obtain roughly the same rate of return, which can effectively avoid non-systematic risks. Because the stock selection of index funds is basically limited to the constituent stocks of the index, it is also called passive management fund. For many investors, index funds provide the most convenient and simple way to invest. Investors don't have to worry about whether the fund manager will change his investment strategy, because index fund managers don't need to choose their own stocks at all, so it doesn't matter who the fund manager is. It can protect your investment from bad fund managers. You don't need to pay attention to the troubles of the fund like those who actively manage the fund, such as whether the investment team has changed or not, and whether the fund manager is still in office. Investing in index funds is just like investing in the whole stock market. In theory, all investors get an average return.

commingled funds

According to the provisions of the Measures for the Administration of the Operation of Securities Funds, more than 60% of the assets invested in stocks are stock funds; More than 80% of the assets invested in bonds are bond funds; Money market funds that only invest in money market instruments are called money market funds; Hybrid funds invest in stocks, bonds and money market instruments, and the investment ratio of stocks and bonds does not meet the above requirements. In other words, hybrid funds are funds that invest in stocks, bonds and money market instruments. According to the proportion of its investment in stocks and bonds, hybrid funds can be divided into four types: partial stocks, partial debts, balanced stocks and bonds and flexible allocation. Partial stock funds usually allocate 50%-70% stocks and 20%-40% bonds. Debt-biased funds are just the opposite of stock-biased funds, with a higher proportion of bonds and a lower proportion of stocks. The allocation ratio of stocks and bonds in stock-debt balance funds is relatively balanced, with a ratio of about 40%-60%. The allocation ratio of flexible allocation funds in stocks and bonds will be adjusted according to market conditions, and there is no fixed ratio.

The purpose of hybrid fund design is to let investors diversify their investments by choosing a fund type, without buying different styles of stock funds, bond funds and money market funds. However, some insiders believe that there is no need to allocate hybrid funds as long as equity funds and bond funds are correctly selected. Zheng Zhuang, a researcher at Good Buy Fund Research Center, pointed out that the attack and defense of hybrid funds are based on the fund manager's accurate judgment of market trends and timely adjustment of the ratio of stocks and bonds. "This is just a hypothesis. We saw that the decline of hybrid funds from 2007 to 2008 was not less than that of equity funds. " Zheng Zhuang explained that when the fund manager predicted that the stock market was about to peak, the pressure of ranking also made the fund manager afraid to significantly reduce his position. In this regard, Jiang Saichun, chief analyst of Desheng Fund Research Center, master of finance in Peking University and one of the most senior fund analysts in the industry, also said that if investors choose stock funds and bond funds as asset allocation types, there is absolutely no need to increase hybrid funds. "Hybrid funds involve the issue of timing. If investors constantly adjust the allocation ratio of stock and bond assets, there is no need for fund managers to do it for them. For investors who don't want or can't choose the right time, we can consider focusing on the allocation of hybrid funds. Jiang Saichun said that the first investment choice for choosing hybrid funds is to hold funds owned by fund companies that have passed the market test and have investment and research strength and long-term stable profitability. In the specific fund selection, investors can refer to funds with strong stock selection and timing, established for more than two years, experienced bulls and bears, and stable fund managers.

Hybrid funds adopt both aggressive and conservative investment strategies, and their returns and risks are lower than those of stock funds and higher than those of bonds and money market funds. It is a wealth management product with moderate risk. Some well-run hybrid funds will even exceed the level of equity funds. The risk is lower than that of stock funds and the expected return is higher than that of bond funds. It is a wealth management product with moderate risk and is more suitable for conservative investors.