It is true that index funds only need to passively track the stock index without fund managers predicting market hotspots, selecting and trading stocks. Index funds such as SSE 50 and CSI 300 invest in the most valuable stocks in the market, and the annual dynamic adjustment of sample stocks fundamentally guarantees their long-term value. However, it must be noted that investment index funds are by no means determined by their own characteristics as advertised by fund companies. Such funds have the following risks:

High position risk. Index funds usually stipulate in the contract that the proportion of shares in the fund's net assets should not be less than 90%, which means that compared with the stipulation that partial stock funds should not be less than 60%, once the market enters a unilateral decline, the former will lose at least 30% more than the latter. Once caught up with the big bear market, it fell from 6000 points to 1600 points, and the losses caused by high positions were even more amazing. It can be seen that if you want to invest in index funds, you must first be able to effectively solve the risks brought about by the reversal of market trends.

The risk of stepping into the air. There are many kinds of index funds, some of which track market indexes, such as SSE 50, SZSE 100 and CSI 300. Some tracking style indexes, such as dividend index and small and medium-sized board index. Because these index funds generally buy fixed-investment stocks, once they are bought, they rarely change.