As an asset allocation, index fund is an indispensable part of family asset allocation. Index fund is a fund that takes a specific index as the target, invests in the constituent stocks of the index, builds a portfolio by buying all or part of the constituent stocks of the index, and tracks the performance of the index. To understand what an index fund is, we must first understand the index system. There are several ways to classify the index system. We will sort it out from three aspects: index sampling standard, asset category and index company.

First, the asset class.

According to the different types of assets, it is mainly divided into stock index, commodity index and bond index.

Stock index: based on stocks, reflecting the overall situation of stock portfolio.

Bond index: based on bonds, reflecting the overall situation of the bond market.

Commodity index: based on tradable commodities, it reflects the overall situation of commodities, such as gold and crude oil.

Second, the sampling standard.

According to the sampling standard of the index, the index basis can be divided into comprehensive index, scale index, industry index, style index and theme index.

Comprehensive index: the comprehensive index is the comprehensive situation of the total index, reflecting the comprehensive changes of complex people. For example, our common Shanghai Stock Exchange Index, Shenzhen Stock Exchange Index and Growth Enterprise Market Index are all comprehensive indexes.

Scale index: classified by market value scale, there are large-cap index, medium-cap index and small-cap index. For example, the Shanghai and Shenzhen 300 Index belongs to the broader market index, and the CSI 500 Index belongs to the mid-market index.

Industry index: an industry index is an index divided by industry, and the common ones are major consumption index, industrial index, energy index, financial real estate index and so on.

Style index: divided into growth index and value index.

Theme index: Theme index is mainly based on international policy or economic driving factors, such as state-owned enterprise reform index and pension index.

Third, index companies.

Domestic index companies are mainly divided into two categories. The first category is an official company such as China Securities Index Co., Ltd., and the second category is a third-party compilation company such as CITIC Securities.

The most famous is CSI Index Company, which is the largest index compiling company in China. Our common Shanghai and Shenzhen 300 Index, CSI 500 Index and CSI 1000 Index all belong to CSI Index Company.

These are probably the main index classifications in the market. Understanding the classification of index will help us have a deeper understanding of index funds and facilitate us to choose and manage our own funds.

The above is a description of index classification, hoping to provide some help for you to invest in index funds.