What does index fund mean?
As the name implies, index funds are fund products with specific indexes (such as Shanghai and Shenzhen 300 Index, S&P 500 Index, NASDAQ 100 Index, Nikkei 225 Index, etc.). ) as the underlying index, and take the constituent stocks of the index as the investment object, build a portfolio by buying all or part of the constituent stocks of the index, and track the performance of the underlying index.
What are the characteristics of index funds?
1. index funds track specific market indexes, such as the Shanghai and Shenzhen 300 Index and the Shanghai and Shenzhen 50 Index in the stock market. Investment index funds can spread risks and reduce the impact of a single investment target on the portfolio.
2. Index funds usually have low management fees. Because its investment strategy is relatively simple, it does not need active management and intraday trading by fund managers, so the cost of the fund is low, which is helpful to improve the income of investors.
3. Index funds are suitable for long-term investment. As the market index tends to rise for a long time, holding index funds can realize investment in the whole market and reduce the impact of short-term market fluctuations.
The above knowledge about index funds is introduced here, but it should be noted that investment needs to be decided according to its own risk tolerance and investment objectives. Choosing excellent fund companies and holding them for a long time are also key investment strategies.