Index fund is a kind of fund with the principle of fitting the target index and tracking the change of the target index to realize the synchronous growth with the market. The investment of index funds adopts the investment strategy of fitting the target index return rate, and invests in the constituent stocks of the target index in a diversified way, so that the stock portfolio return rate fits the average return rate of the capital market represented by the target index. Index fund is an indispensable fund in mature securities market. In western developed countries, like other index products such as stock index futures, index options, index warrants, index deposits and index bills, they are increasingly favored by various institutions including exchanges, securities companies, trust companies, insurance companies and pension funds.
Index fund is a fund that ensures that the performance of securities portfolio is similar to that of market index. Operationally, it is the same as other funds. The difference between index funds and other funds is that it tracks the performance of stock and bond markets and follows a stable strategy. Its advantages in the securities market include not only effectively avoiding unsystematic risks, low transaction costs and delaying tax payment, but also the characteristics of less monitoring investment and simple operation. Therefore, in the long run, its investment performance is better than other funds.
Index fund is a kind of fund that constructs a portfolio for securities investment according to the principle of compiling securities price index. Theoretically speaking, the operation method of index fund is very simple, as long as you buy the corresponding proportion of securities according to the proportion of each securities in the index and hold it for a long time.
For purely passively managed index funds, the capital turnover rate and transaction cost are relatively low. Management fees are often very small. Such funds will not invest too much money in certain securities or industries. Generally, full investment will be maintained, and there is no market speculation. Of course, not all index funds strictly meet these characteristics. Different index funds will also adopt different investment strategies.
At present, there are three index funds, Xinghe, Pufeng and Tianyuan, which are "optimized index funds" with the characteristics of index funds.
The United States is the most developed western country in index funds. On 1976, Pioneer Group took the lead in establishing the first index fund in the United States-Pioneer 500 Index Fund. The emergence of index funds initiated a revolution in American securities investment industry, forcing many competitors to design low-cost products to meet the challenges. So far, there are more than 400 index funds in American stock market, and they are still growing at a high speed every year. The latest and most exciting index fund product is exchange traded fund (ETF). Nowadays, in the United States, the types of index funds include not only various American stock index funds, American industry index funds, global and international index funds and bond index funds, but also growth, leverage and reverse index funds. Exchange traded funds are a newly developed index fund.
The rapid development of index funds in China stock market benefits from the unique advantages of funds. In June 2002, SSE 180 Index (1 1049.29, -4 1 1.46, -3.59%) was launched in Shanghai Stock Exchange, and Shenzhen Stock Exchange also launched SZSE/KLOC. After that, the first domestic index fund, Huaan SSE 180 Index Enhanced Securities Investment Fund, entered the market. At the beginning of 2003, another fund, Tiantong SSE 180 Index Fund, which closely tracks the trend of SSE 180 Index Fund, also went public. However, the development of index funds in China is not smooth sailing. In order to avoid systematic risk and individual stock investment risk, China's preferred index funds adopt different operating principles from those of foreign index funds. The main difference is that the managers of domestic optimization index funds can adjust the index positions according to the judgment of the index trend, and use the advantages of research and financial analysis to prevent some risky stocks from entering the portfolio in the process of subjective stock selection. In the part of indexed investment, funds Xinghe (2.232, -0.03,-1.50%,) and Jingfu track the Shanghai Composite Index of A shares, while funds Pufeng (2.206, -0.02,-1.03%,) track the Shenzhen Composite Index of A shares. Judging from the actual operation results of such funds, the performance is not ideal. The reasons are not only the defects of China stock market itself, but also the management reasons of fund companies. Nevertheless, index funds have become a favorite financial tool for many investors. With the continuous improvement of China's securities market and the vigorous development of the fund industry, I believe that index funds will have great development potential in China.