Pro-cyclical refers to industries that have strong correlation with domestic or international economic fluctuations. Typical industries include bulk raw materials, chemicals, banking, securities and real estate. Simply put, the core factor affecting cyclical fluctuations is the supply relationship. As the supply decreases, the demand increases, and the demand exceeds the supply, which leads to the boom cycle of the industry. On the contrary, due to the increase in supply and the decrease in demand, bubbles are generated and the economy is sluggish.
Therefore, compared with other index funds, pro-cyclical index funds are not suitable for long-term holding, and the investment strategy of low ambush and high selling should be adopted. Because the quasi-periodic index fund completely tracks the index and has obvious periodicity, if it doesn't grasp the rhythm for a long time, it may go from low point to high point and then back to low point after a cycle, and finally the income in its hand is only imaginary, so it is very important to grasp the rhythm of buying low and selling high.
For beginners, active funds may be more suitable, and there are many excellent theme funds in the cycle industry.
At the same time, if you hold other popular funds, such as semiconductors and new energy funds, you can also balance some cyclical industry funds at a low level to diversify your investment and reduce your investment risks.