If we compare the tracking error of 0 1 carefully enough, we will find that the funds are also tracking the Shanghai and Shenzhen 300 index, but the returns will still be very different.
There are many reasons for this situation, and there are three main points here. One is that the fund manager's ability to control the tracking error of index funds is inconsistent; Second, when the index constituent stocks were adjusted, the fund manager did not adjust the positions in time; Third, some funds do not completely copy the index, but selectively copy it.
The first goal of index fund is to copy the index. If the trend of an index fund is very different from that of the index, then this fund is not a particularly good choice for investors who are optimistic about the index.
How to judge the tracking ability of this fund? In fact, there is already a quantitative index, which is tracking error. Tracking error refers to the standard deviation of the return rate between the portfolio return rate and the benchmark return rate, which reflects the management risk of the fund.
When we select the Shanghai and Shenzhen 300 index funds, we will compare the tracking errors of different funds. The smaller the tracking error, the stronger the tracking ability of this fund.
02 Fund Scale When choosing a fund, we must pay attention to the fund scale and try to choose a fund with a scale of more than 200 million. There are three reasons.
Don't worry about the fund being liquidated. It is impossible for a fund to operate all the time, and there is still the risk of liquidation. The risk of liquidation is higher if the fund size is too small.
(2) It is more conducive to the allocation of funds. The larger the index fund is, the more favorable it is to allocate funds when diversifying investment, which can reduce transaction costs and better track the index.
(3) Reduce the impact of large purchase and redemption. Large purchase and redemption have a great influence on the net value of the fund. Basically, every year, there are some funds whose net value skyrockets or plummets due to huge redemption. Relatively speaking, the larger the scale of the fund, the smaller the impact on the net value of the fund when dealing with large purchases and redemptions.
When buying the CSI 300 Index Fund, we need to pay attention to the fund size and try to choose a fund with a fund size of more than 200 million.
In the case of holding the rate for a long time, the lower the rate, the higher the income we get. Therefore, when choosing the CSI 300 Fund, the lower the rate, the better.
Fund expenses generally include three categories: subscription fee, redemption fee and operation fee (management fee, custody fee and sales service fee).
According to the fund's subscription and redemption rules, you can calculate the cost of holding the fund for one year.
Generally speaking, Class A funds are suitable for long-term holding, while Class C funds are relatively more cost-effective in the short term.
To sum up, when purchasing the Shanghai and Shenzhen 300 index funds, we can screen them by tracking error, fund size and rate. Among them, the smaller the tracking error, the better, and the larger the fund size, the lower the rate.
(PS: These three indicators can also be used for the selection of other index funds)
Tips: The fund is risky, so the investment should be cautious.