More and more people are interested in stock market investment, which is also related to the rise in the market in the first quarter.

For novice investors, it is more recommended to invest in index funds.

Index funds are passive investment methods that track indexes. Among them, index-enhanced funds have certain active components, and fund managers can play a certain role.

So what are index-enhanced funds?

Let’s talk about it below.

What are Index Enhanced Funds?

From the perspective of investment strategy, index funds are also called passive funds. The reason why they are called so is because the investment strategy of index funds is very passive, which is to copy the trend of the index by holding the constituent stocks of the index in a certain proportion without mixing in the index.

Subjective factors of investment research teams such as fund managers.

To judge whether an index fund is good or not, it is not based on its performance like an ordinary fund, but on its tracking accuracy.

A perfect index fund must not only follow the rise of the index, but also follow the fall without hesitation when the index falls.

When investing in index funds, you focus on the long-term upward trend of the index and ignore short-term fluctuations.

The index enhancement fund is not willing to be a pure index fund. It is optimistic about the long-term trend of the index, but is not willing to only obtain the market's average expected return. Therefore, while tracking the index, the fund will use some active strategies to try its best to run.

Win index.

Generally speaking, index funds invest more than 90% of their positions in index constituent stocks, copying the index trend. The fund manager will not take the initiative to time and select stocks, while the index enhanced fund has a maximum position of 20%, which allows the fund manager to freely

Select stocks and strive to earn expected returns that exceed the index. This part of the investment is the same as active stock funds.

Well, that’s it for introducing the index enhancement fund. I hope it will be helpful to everyone.

Warm reminder, the stock market is risky, so investment needs to be cautious.