Dividend index funds and industry index funds belong to index funds in the fund market, also known as passive funds. Index fund is an investment tool, and its fund manager directly tracks a specific market index without stock selection or market forecast. For example, the dividend index foundation tracks the performance of the dividend index, and the industry index foundation tracks the performance of a specific industry. The investment strategy of index funds is passive, so the management cost is low, and they usually perform better than active funds.
Dividend index funds refer to index funds that invest in companies with stable dividend records. This kind of company is usually the industry leader, with stable business, mature management and stable cash flow and dividend record. Dividend index funds are usually dividend-oriented and pursue stable income and cash flow. Dividend index funds are usually suitable for investors who pursue stable income, especially those who need fixed income, such as retirees.
Industry index funds refer to those index funds that invest in specific industries. Such funds usually track specific industry indexes, such as technology industry, medical industry, financial industry and so on. The investment strategy of industry index funds is to concentrate funds on a specific industry in order to obtain the average income of that industry. Industry index funds are usually suitable for investors who are interested in a certain industry or are uncertain about the performance of the whole market.
Dividend index funds and industry index funds are passive funds, so the management cost is lower and better than active funds. The investment strategy of index funds is passive, so their performance is usually more stable than that of active funds. The investment strategy of index funds is also more suitable for investors who pursue long-term stable returns. Dividend index fund and industry index fund are both important parts of portfolio.