The first index fund in China is Huaan SSE 180 Index Enhancement Fund, which was established on June 8, 2002, and the domestic index fund investment officially kicked off.
After nearly 20 years of development, the types and scales of domestic index funds have developed well. The number of domestic index funds reached 766, with net assets exceeding 1. 12 trillion RMB (including ETF-linked funds).
Index fund is the simplest investment and one of the most suitable investment methods for financial management. Why do you say that? Mainly for the following reasons.
First, the passive management mode of index funds.
Index fund is a passive fund, aiming at an index, buying all or part of the constituent stocks of the index and tracking the performance of the index. The primary purpose of index fund is to track the performance of index and reduce the tracking error.
Due to the passive management characteristics of index funds, the dependence on fund managers is relatively low, and fund managers do not need to actively choose individual stocks for investment and asset allocation, so the influence of human decision-making factors is less, because the influence of fund managers is relatively low, which greatly reduces the difficulty of fund managers' selection and pays more attention to the index target itself.
Second, the choice of index fund varieties.
There are more than 7,000 Public Offering of Fund branches in the market. It must be very difficult to select funds from so many teams, but it is different if it is limited to index funds. The performance of similar index funds will not be much different, and the main influencing factors are the time of establishment (bull market or bear market), the time of establishment and the timing of opening positions (whether to open positions in high index or low index).
The choice of index funds is simple. If you don't have a deep understanding of a certain sector or theme or are optimistic for a long time, it is suggested that you can directly choose broad-based index funds to invest, such as SSE 50 Index, CSI 300 Index and CSI 500 Index.
Choose a broad-based index fund of a large company that has been established for a long time and is mature in operation, so that the goal is basically clear.
Third, consider the three elements of investment.
The three elements of investment are risk, profit and liquidity.
The first is risk. Index funds have moderate risks among all investment varieties and are suitable for more than 90% investors to allocate assets. If compared in funds, the risk coefficient is higher than that of money funds and bond funds, but lower than that of mixed funds and equity funds.
Then there is profitability. We use the Shanghai Composite Index for backtesting. In the past, the Shanghai Composite Index used the valuation dynamic balance strategy, and the annualized rate of return was 10.8%.
This strategy is very suitable for beginners, and the long-term annualized rate of return is 10%. If you can insist on investing, this investment income is also a very valuable asset.
Index funds are also very liquid. If they continue to use money, index funds can also redeem the emergency in time. In general, it is best to stick to long-term investment.
Fourth, the index fund will vote.
The most suitable way to invest in index funds is to make a fixed investment plan, which saves time and effort. Index fund fixed investment plans can be set for multiple investment targets, such as education funds and pensions.
Choose one or several broad-based indexes with relatively low valuation and set up a fixed investment plan. For the number of office workers with a fixed income every month, it is most appropriate to choose a fixed monthly investment. Setting the last day or two of the monthly salary payment date as the deduction date can not only adhere to the fixed investment, but also form the habit of saving money.
To sum up, the fixed investment of index funds is the simplest and most suitable investment method for financial management.
I hope the above contents are helpful to you.