First of all, index funds strictly follow the index and buy the constituent stocks of the index, aiming at reducing the tracking error and pursuing the same income level as the index.
On the other hand, enhanced funds do some active operations on the basis of tracking index about 80%, such as innovation, timing, stock selection, rotation and buying option futures. , hoping to get more than the original index.
For example, the CSI Bonus Index Enhancement Fund of Fuguo wrote in its investment objectives and investment philosophy: This fund is a stock index enhancement fund, which follows the principle of "programmed index investment, limited stock adjustment and refined risk management", effectively tracks the CSI Bonus Index and strives to surpass it, so as to share the benefits brought by China's long-term economic growth. Steady as the key link, supplemented by transcendence; On the basis of completely copying the target index, limited stock adjustment is carried out, and on the basis of reasonably controlling the tracking error, the medium and long-term excess returns are pursued.
Among them, the excess return model is used to describe the potential return of individual stocks from different dimensions. After the excess return model scores, the higher the score, the more investment value the stock has. I hope that through such screening, better stocks can be selected to join the portfolio.
Joining innovation strategy is a common way to increase income. At that time, when listed in science and technology innovation board, the income of some funds would suddenly be greatly enlarged, especially some small funds. It is precisely because of the new income, the domestic market, the new shares will have a high probability of rising after winning the lottery, so if the fund wins the lottery, the net value of the fund will suddenly rise.
Therefore, the enhanced index fund is a variety between passive tracking of index funds and artificial operation of active funds.
From the data point of view, the average annualized rate of return of enhanced index funds is higher than that of ordinary index funds, which is about 5% higher, and the volatility and retracement are also smaller than that of index funds.
Is it possible to give up index funds and choose enhanced index funds? Not all enhanced funds are better than index funds.
Enhanced index funds mainly take the Shanghai and Shenzhen 300 as an example, and the CSI 500 and other broad-based indexes are the main ones. As can be seen from the rate of return ranking, industry funds and enhanced index funds rank high. Only compared with similar index funds, enhanced index funds have higher yield.
However, the risk of the fund will also increase relatively. The introduction of most enhanced funds will show that this fund is an enhanced stock index fund, which belongs to a variety of securities investment funds with higher expected risks and higher expected returns, and its expected risks and expected returns are higher than those of hybrid funds, bond funds and money market funds.
One more thing, enhanced funds will have higher requirements for fund managers, so when choosing enhanced funds, we also need to look at the historical performance and operational level of fund managers.
Therefore, whether to choose the enhanced index still needs to proceed from the investors themselves and comprehensively consider all aspects of the fund before making a decision.