An index fund is a fund that builds a portfolio by tracking a specific index and buying all or part of its constituent stocks. The positions of index funds are basically fixed. According to the judgment of the fund manager, different index funds will have different positions for different constituent stocks. So is the index fund's income high? Is it stable? So today, Bian Xiao is here to sort it out for everyone. Let's take a look!

Do index funds have high returns?

The return of index funds is relatively high. Under normal circumstances, the return of index funds can outperform most stock funds in the same period.

Index funds can allocate more than 90% of stock positions, and compared with general stock funds, the stocks held by index funds are all index components. In the A-share market, most of the stocks identified as constituent stocks of various indexes are relatively high-quality and representative stocks under the same selection criteria. Therefore, the position portfolio of index funds is a high-quality stock portfolio recognized by the market.

Ordinary stock funds are stock combinations made by fund managers according to their own judgments on market conditions, which may be better or worse than the index. However, in the case of long-term holding, the combination of index constituent stocks is more risk-resistant than the random combination of other stocks, and the return of index funds will be higher.

Is the index fund stable?

The return of index fund is relatively stable, because index fund is a kind of fund that pursues the average return of the market. Because index funds copy the stock index highly in the stock market, the net value fluctuation of index funds is similar to the fluctuation of stock index, while China's stock index has been fluctuating and rising for many years, so in the long run, the income of index funds is relatively stable and rising.

What does the seven-day annualized rate of return of the money fund mean?

The seven-day annualized rate of return of the money fund is a reflection of the rate of return of the money fund, which calculates the average rate of return of the money fund in the last seven days. Because most products have expected annual income, it is convenient for investors to compare the income of wealth management products by converting daily income into annual income. Its calculation method is: annualized rate of return = [(investment income/principal)/investment days ]__365× 100%.

The 7-day annualized income of the money fund is constantly changing with time, so the income of the money fund fluctuates every day, and investors can only use it as a reference index for short-term investment. Because the liquidity of the money fund is very strong, investors can pay attention to its seven-day annualized rate of return, buy the money fund when the value is high, and redeem it after the rate of return drops. The high liquidity of the money fund is very suitable for investors to put in temporarily idle funds.