1, I don't know whether it's free to compile indexes, or for what reason. CSI Index Company has compiled five Internet-related indexes. But we often use two red boxes: CSI Overseas China Internet 50(H30533), hereinafter referred to as Internet 50. And CSI overseas China internet index (H 1 1 136), hereinafter referred to as China internet. At first, the compilation rules of these two indexes were exactly the same. Internet companies listed overseas in China are selected and weighted according to the market value of free circulation. The upper limit of the weight of a single stock is 10%. The only difference is that Internet 50 has only 50 constituent stocks, while China Internet should include all Internet companies listed overseas, and the constituent stocks can exceed 50. However, over the years, the number of Internet companies listed overseas has not exceeded 50, so the number of constituent stocks in the two indices has always been the same. For example, it's 45 now. These two indices are always the same. How can this work? As a result, CSI Index Company announced in May 20 19 that the rules of Internet 50 Index will be changed in the future, and the upper limit of the weight of a single company will be changed from 10% to 30%. This gap has since widened. Although the choice of constituent stocks is still the same, in the Internet 50, the weight of Tencent and Ali is 30%. In China Internet Index, the weights of Tencent and Ali are only 10%.
2. the internet industry is an industry with a boss and no second child. Ahead of everyone. The leading position of Tencent and Ali is unshakable by other companies. If you want to buy the Internet, buy Tencent Ali. Of these two indices, Tencent Ali accounts for 60% of the Internet 50 Index, while Tencent Ali only accounts for 20% of the China Internet Index. Obviously, the quality of the Internet 50 index is higher. So, if you want to buy, buy an index fund that tracks the Internet 50 index. Index funds that track China's Internet index are much worse. In the Internet industry, valuation has always been a difficult problem. Except Tencent Ali, most Internet companies are still at a loss. There are many ways to look at sales, active users and cash flow. Fortunately, we chose the Internet 50 Index, so it is much easier to tailor a valuation method according to it. Since Tencent Ali accounts for 60% of the Internet 50 Index, we might as well just look at Tencent Ali. On the whole, if the valuations of Tencent and Ali are ok, then we think the whole index is ok; If Tencent and Ali are expensive, then we think the whole index is expensive. Although this method is simple and rude, its logic is common. The pricing of leading enterprises in overseas markets has a premium. The pricing of small Internet companies will also refer to the pricing of leading enterprises. The Internet industry in China has developed for so many years, and it has passed the super-high-speed development period. If we want to be an index representing China's future economy, we should use the combination of Shanghai and Shenzhen 300 Index and Internet 50 Index, which is more reliable.