Index fund is a fund that ensures that the performance of securities portfolio is similar to that of market index. Operationally, it is the same as other funds. The difference between index funds and other funds is that it tracks the performance of stock and bond markets and follows a stable strategy. Its advantages in the securities market include not only effectively avoiding unsystematic risks, low transaction costs and delaying tax payment, but also the characteristics of less monitoring investment and simple operation. Therefore, in the long run, its investment performance is better than other funds.
The United States is the most developed western country in index funds. On 1976, Pioneer Group took the lead in establishing the first index fund in the United States-Pioneer 500 Index Fund. The emergence of index funds initiated a revolution in American securities investment industry, forcing many competitors to design low-cost products to meet the challenges. So far, there are more than 400 index funds in American stock market, and they are still growing at a high speed every year. The latest and most exciting index fund product is exchange traded fund (ETF). Nowadays, in the United States, the types of index funds include not only various American stock index funds, American industry index funds, global and international index funds and bond index funds, but also growth, leverage and reverse index funds. Exchange traded funds are a newly developed index fund.
The rapid development of index funds in China stock market benefits from the unique advantages of funds. In June 2002, it was only half a year before the SSE launched the SSE 180 index, and the Shenzhen Stock Exchange also launched the SZSE 100 index. After that, the first domestic index fund, Huaan SSE 180 Index Enhanced Securities Investment Fund, entered the market. At the beginning of 2003, another fund, Tiantong SSE 180 Index Fund, which closely tracks the trend of SSE 180 Index Fund, also went public. However, the development of index funds in China is not smooth sailing. In order to avoid systematic risk and individual stock investment risk, China's preferred index funds adopt different operating principles from those of foreign index funds. The main difference is that the managers of domestic optimization index funds can adjust the index positions according to the judgment of the index trend, and use the advantages of research and financial analysis to prevent some risky stocks from entering the portfolio in the process of subjective stock selection. In the part of indexed investment, funds Xinghe and Jingfu track the Shanghai A-share composite index, while fund Pufeng tracks the Shenzhen A-share composite index. Judging from the actual operation results of such funds, the performance is not ideal. The reasons are not only the defects of China stock market itself, but also the management reasons of fund companies. Nevertheless, index funds have become a favorite financial tool for many investors. With the continuous improvement of China's securities market and the vigorous development of the fund industry, I believe that index funds will have great development potential in China.
First of all, its performance is relatively transparent. When investors see that the target benchmark index tracked by index funds (such as SSE 180 index) has gone up, they will know how much the index funds they invest in can go up today. If the benchmark index falls today, you can know how much your investment has lost without checking the net value. Therefore, many institutional investors and some individual investors who can see clearly the general trend and are not sure about individual stocks prefer to invest in index funds, because index funds can give full play to the advantages of such investors in judging the general trend of the market, and there is no need to have the distress of "earning the index but not making money".
Secondly, the liquidity of its asset portfolio is better than that of general funds held centrally. Take Hua 'an SSE 180 Index Enhanced Fund currently being issued as an example. Not only does it stipulate that fund managers should allocate assets mainly according to the weight and composition of SSE 180 constituent stocks, but also stipulates that the number of investment in SSE 180 constituent stocks should not be less than 120. In other words, even in extreme cases, Huaan SSE 180 Index Enhanced Fund will not invest less than 120. Due to the dispersion of equity, the fund's future share sale has little or no impact on the stock price. In this way, the authenticity of the net asset value of the fund will be higher.
Third, the cost of investing in index funds is generally low. Because index funds generally adopt the investment strategy of buying and holding, their stock transaction costs will be less; At the same time, fund managers will charge lower management fees for index funds. For example, the management fee of Huaan SSE 180 Index Enhanced Fund is only equivalent to 2/3 of the management fee of stock funds that actively enter the market; The handling fees and sales fees charged by its custodians have also been greatly reduced. Many investors may not care much about this seemingly small difference, but if it is a long-term investment, the cost advantage of index funds will make investors gain a lot.
Index fund refers to a fund that buys all or part of the securities in the securities market included in the index according to the index standard, and its purpose is to achieve the same income level as the index.
For example, the goal of the Shanghai Composite Index Fund is to obtain the same income as the Shanghai Composite Index. The Shanghai Composite Index Fund buys the stocks in the index according to the composition and weight of the Shanghai Composite Index, and accordingly, the performance of the Shanghai Composite Index Fund will fluctuate like the Shanghai Composite Index.
The most prominent feature of index funds is low cost, and delaying tax payment will have a great impact on the fund's income. Moreover, this advantage will be more prominent for a long time. In addition, the simplified portfolio will make it unnecessary for fund managers to contact brokers frequently, or to choose stocks or determine market opportunities.
Specifically, the characteristics of index funds are mainly manifested in the following aspects:
1, low cost. This is the most prominent advantage of index funds. Expenses mainly include management expenses, transaction expenses and sales expenses. Management expenses refer to the expenses incurred by fund managers in investment management; Transaction cost refers to the transaction expenses such as brokerage commission when buying and selling securities. Because index funds adopt holding strategy and do not need to exchange shares frequently, these expenses are far lower than those of actively managed funds, and the difference sometimes reaches 1%? /FONT & gt； 3%, although this is a small number in absolute terms, the accumulated results will have a great impact on the fund's income for a long time because of the compound interest effect.
2. Disperse and prevent risks. On the one hand, because index funds are widely diversified, the fluctuation of any stock will not affect the overall performance of index funds, thus diversifying risks. On the other hand, because the indexes pegged by index funds generally have a long tracking history, the risks of index funds can be predicted to some extent.
3. Deferred tax payment. Because index funds adopt the strategy of buying and holding, the turnover rate of the stocks they hold is very low. Only when a stock is removed from the index, or when investors demand to redeem their investments, index funds will sell their stocks and realize part of the capital gains. In this way, the annual capital gains tax (in developed countries such as the United States, capital gains are within the scope of income tax) is very small. Coupled with the compound interest effect, delaying tax payment will bring many benefits to investors.
4. Less monitoring. Since operating index funds does not need to take the initiative to make investment decisions, fund managers basically do not need to monitor the performance of funds. The main task of index fund managers is to monitor the changes of corresponding indexes, so as to ensure that the composition of index funds is suitable for them.