1, tracking error
The tracking error of index fund is the distance between the performance of index fund and the performance of tracked index, and the tracking error is the embodiment of fund manager's management ability. The annual tracking error of index funds is best in. Usually, the smaller the long-term tracking error, the more potential it is to be called a high-quality index fund.
2. constituent stocks
There are problems with the constituent stocks of industry index funds or theme index funds. If the constituent stocks are illiquid, suspended or resumed, the tracking error will be increased.
3. Subscription rate
Fund rates mainly include management rates, sales service rates and custody rates. And the proportion charged by different fund types is different. The rate of the fund has nothing to do with the profitability of the fund. A high rate does not mean that the expected income is also high. Therefore, when buying funds, try to choose products with low rates.
4. Fund size
For ordinary passive index funds, the larger the fund scale, the less the transaction cost, and the more funds can be used to track the index. Therefore, when buying an ordinary index fund, the bigger the fund, the better. Index-enhanced funds, the larger the fund scale, the higher the requirements for fund managers. Therefore, it is best for such funds to have a moderate scale.
5. New and old funds
The performance of the fund is not necessarily related to whether the fund is a new fund, but index funds generally participate in innovation, which may bring considerable expected returns to investors who participate in innovation.
The above content about how to buy index funds is cost-effective, and I hope it will help everyone. Warm reminder, financial management is risky and investment needs to be cautious.