In recent years, index funds have gradually attracted the attention of investors, especially ETF funds, because of their simplicity, high efficiency, transparent operation and low cost. So what are the index funds with fixed investment? What are the index funds suitable for fixed investment? The following is analyzed by Bian Xiao for everyone:

What is an index fund?

An index fund is a fund product that takes a specified index as the target and the constituent stocks of the index as the investment target, and builds a portfolio by purchasing all or part of the constituent stocks of the index to track the main performance of the index. Therefore, investors are advised to pay attention to the constituent stocks of index funds when choosing index funds.

For passively managed index funds, the rules of index funds are open and transparent. Index funds do not buy and sell stocks frequently, and the turnover rate and transaction cost are relatively low, and the investment cost is often not very high. Moreover, index funds will not invest too much money in a specific securities or industry, thus effectively dispersing risks and reducing overall fluctuations.

What are the index funds suitable for fixed investment?

1, broad base index

From the perspective of volatility and growth, broad-based index funds are more suitable for fixed investment, such as SSE 50 Index, CSI 300 Index and CSI 500 Index. Because the better timing of fixed investment is when the fund valuation is low.

2. Industry index

Suggest consumer industries (such as tobacco and alcohol, household appliances, etc.). ) and the pharmaceutical industry. These two industries are closely related to people's daily life. Consumption is a necessity and medicine is just needed, so it is suitable for long-term fixed investment.

Investors can consider from the perspectives of fund size, fund cost and tracking error:

Large-scale funds have good liquidity, are less affected by new investors' redemption applications, and have good capital stability.

For fund fees, funds with lower management fees and custody fees can be appropriately selected to reduce investment costs.

As for the tracking error, the purpose of the index fund is to track the performance of the index. It is only a tool for our investment index, so the lower the tracking error, the better, and the best annual tracking error is below 1.5%.

What are the index funds with fixed investment?

With the same investment starting point and ending point, index funds with large fluctuations bring higher returns than those with small fluctuations. Through constant fixed investment, we can get the low price in the bear market, reduce the cost and get a higher share. When the fund goes up, it can get higher returns. Therefore, funds with large fluctuations are more suitable for fixed investment.

For index funds with high growth rate, funds with large fluctuations certainly make money. If the investment target is not good, it is difficult to make money. Therefore, in the volatile index, high-growth funds should be given priority, which will benefit more when encountering a bull market.

Generally speaking, we believe that small-cap companies have higher growth. Let's compare the GEM index with the CSI 300 index. The average market value of GEM stocks is much lower than that of Shanghai and Shenzhen 300 constituent stocks. The data shows that the average annualized rate of return of investment in GEM index is 23%, while the average annualized rate of return of investment in CSI 300 index is 10%. To sum up, it is more appropriate to choose the index with large fluctuation and high growth as the fund investment. The higher the volatility, the higher the rate of return, while the high growth index with smaller market value has more profit space in the future. The combination of the two may bring you unexpected surprises. At the same time, we should also note that high fluctuation and high growth also mean high risk, so we must measure our risk tolerance before making a choice.

What are the index funds suitable for fixed investment?

The essence of the index is to screen out listed companies that want to invest according to specific rules. The index of selecting constituent stocks according to the market value of stocks is called broad-based index; According to different industries and different themes, the index of constituent stocks is the industry index.

For beginners, it is suggested that the fixed investment index funds should start with broad-based indexes, such as SSE 50 Index, CSI 300 Index and CSI 500 Index. The best time to invest in index funds is when the index is undervalued.

On the whole, the SSE 50 Index and CSI 500 Index are relatively undervalued. After selecting the index, you should choose the corresponding index fund. The same index, the corresponding index fund is similar. If we want to pursue perfection, we can consider it from the perspectives of fund size, fund cost and tracking error.

The bigger the fund, the better, because the large-scale fund has good liquidity and is less affected by the redemption application of new investors, and the stability of the fund is better; For the fund cost, you can choose the fund with lower management fee and custody fee appropriately to reduce the investment cost;

As for tracking error, the purpose of index fund is to track the performance of index. It is only a tool of our investment index, so the lower the tracking error, the better. The annual tracking error should be less than 1.5%. Ok, what are the index funds suitable for fixed investment? I hope it helps you.

So which specific indexes are suitable for fixed investment?

In the actual fund investment, many investors are keen to invest in various indexes, some look at the valuation, but they don't know which valuation index this industry index is suitable for; Some have voted with the big V, but it turns out that long-term fixed investment, the income is not as good as buying a Shanghai and Shenzhen 300 index casually; Some look at the recommended investment, see the popular recommendation on the fund consignment platform, and directly open the road to fixed investment; Part of it is because of red envelopes. It is not a pity to get a full red envelope from the fund, but there are not many funds to apply for, so I decided to invest in this index fund.

However, not all index long-term fixed investment is profitable. For example, the CSI Media Index plunged all the way from 15 to the highest point, and there was no upward trend during the period. If you invest in this index fund, you will lose money after five years, and you are not sure when this time will last. Another example is CSI Environmental Protection and CSI Military Industry. Although it will go up one day, we have spent a lot of time. With this time, we have made a round of fixed investment in other index funds.