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.

Second, the cost of index funds is low. This is the most prominent advantage of index funds. Expenses mainly include management expenses, transaction expenses and sales expenses. Because index funds adopt the holding strategy, they don't need to exchange shares frequently. These expenses are much lower than those of actively managed funds, and the difference sometimes reaches 1%, which will have a great impact on the fund's income.

Third, the performance of index funds is highly transparent. When investors see that the target benchmark index tracked by index funds has gone up, they will know how much their index funds can go up today. Therefore, many institutional investors and some individual investors who can see clearly the general trend and individual stocks prefer to invest in index funds, and there is no need to worry about "earning the index but not making money".

The fourth is to effectively avoid non-systematic risks. Compared with other funds, index funds have the advantage of effectively avoiding unsystematic risks. On the one hand, because index funds are widely dispersed, any single