Index funds invest in a specific index, such as the Shanghai and Shenzhen 300 Index, so they do not directly participate in stock investment, but indirectly invest in these 300 stocks. Therefore, the risk of index funds is relatively scattered, which is very suitable for stable investors.

Advantages of index funds:

1, low cost. Because index funds track a specific index, they don't need managers to have any investment strategies, so the investment cost is not high, and the management cost is lower than that of stock funds or enhanced index funds.

2. The performance is relatively transparent. Because index funds track an index, the change of fund net value can be directly seen through the rise and fall of the index, so there will be no fraud.

3. diversify investment. Buying an index fund is equivalent to buying a basket of stocks, and the risk is relatively small.

4. Low management risk. That is, index funds will not have the risk of stock selection, stock selection and stock exchange.

Its shortcomings are: leading the rise but not resisting the fall. Most index funds fall to varying degrees when the stock market falls.