Several funds buy or swap stocks according to some algorithmic rules. There is no human factor. The risk of index funds is relatively high. Generally, it is more suitable for the way of fixed investment of funds, average share and reduce costs. So how do you buy index funds? Today, Bian Xiao has compiled some fund-related knowledge for everyone. Let's have a look!

How to buy index funds for fixed investment

Index fund is a fund that invests in index stocks, and its goal is to obtain roughly the same rate of return as the index. The main indexes of A-share market are: SSE 50 Index, CSI 300 Index, CSI 500 Index, GEM Index, Dividend Index, US Stock Index, Hong Kong Stock Index and so on.

When buying index funds, we need to consider the scale of index funds, and don't choose too small, because the scale of index funds is too small, which may be affected by large-scale subscription and large-scale redemption, resulting in a large tracking error of index funds and affecting fund returns.

Secondly, we should choose a good fund manager, because buying index funds is equivalent to giving funds to fund managers for investment, so we should choose a good fund manager. When choosing, try to choose fund managers with relatively high working years, and give priority to fund managers who have worked for more than 5 years. In addition, you can check how the fund managed by the fund manager is and whether the rate of return is high.

After selecting the index fund, you can set a fixed amount, time and deduction account through the fixed investment fund. Then, after the specified time, the system will automatically set the buying operation, without the operation of investors. As long as the account has funds, it will automatically deduct the fee.

The advantage of the fund's fixed investment is that when the market is in a downward trend, buying with the same amount at this time can gain more shares, reduce costs and spread risks.

What does index fund mean?

Let's give a simple example: suppose you are an English teacher and want to know the average English scores of the students in your class, so you organize an English exam. After the exam, you add up all your English scores and get the average score, which is equivalent to the index of English scores. If this data is recorded in every exam, then the trend of this data can reflect the average English score of your class. This is the concept of index.

For index funds, it is a fund product that takes a specific index as the target, takes the constituent stocks of the index as the investment object, and invests in a portfolio by purchasing all or part of the constituent stocks of the index to track the performance of the index.

For example, a fund company has developed a fund product, which is to buy the same basket of stocks according to the stock selection rules of the index. This is the index fund. It should be noted that the performance of index funds depends largely on the performance of the index, and generally depends on the increase and deviation of the reference index. As the reference index rises, the net value of index funds will also rise, and the dependence on fund managers is not high.

Because the index fund adopts passive trading, its transaction cost is relatively low, and the subscription fee and management fee are relatively low. However, it should be noted that the risk of index funds is relatively high, and the risk tolerance should be considered when purchasing.

Fund withdrawal

The withdrawal of funds is simply the decline of funds. Let's give a simple example: suppose an investor buys a fund, but the fund has been rising from its net value 1 yuan to its net value 1.5 yuan some time ago, but it began to decline in the past two days, and the fund's net value fell to 1.2 yuan very quickly, which means the fund quit.

Fund withdrawal can also be said that the net value of the fund has decreased compared with the previous period. In a more popular way, the fund invested by investors has suffered losses in a certain period of time.

The withdrawal rate of funds is not as high as possible, nor is it as low as possible. The withdrawal rate represents the fluctuation range between the highest point and the lowest point of the fund's net worth over a period of time. For example, if an investor unfortunately buys at the highest point, what is the biggest loss?

For investors who buy funds at one time, the smaller the withdrawal amount, the better. Because the withdrawal is small, the biggest loss in the future is likely to be smaller. However, if the fund is fixed, the bigger the withdrawal, the better. Because the bigger the withdrawal, the lower the cost of buying funds during the decline, and the more shares you get, which can reduce the cost of buying.