Of course, many enhanced indexes and smartbeta funds are essentially index funds, such as the more familiar E Fund SSE 50 Enhanced and Huaxia Chuangcheng/Huaan Chuang50.
Let's touch them one by one.
The first is the broad base index. In fact, many novices don't know what to buy at first, which may be from the fixed investment of the Shanghai and Shenzhen 300 index funds. This method is basically difficult to make mistakes, but it is simple and mediocre, and it is difficult to obtain excess returns from the market.
I have to say a number of big V's in earlier years, such as bank screws, E-big, Wangjingborg, Lao Luo and so on. It has made outstanding contributions to the popularization of index funds and done a lot of teaching work, which is much better than the teaching activities of many financial institutions.
Broad-based index is suitable for old people to play, with low rate, transparent and predictable operation and average market income. In this field, each index has a king: Huatai Bairui's CSI 300ETF, Huaxia Fund's SSE 50ETF, E Fund's GEM ETF and southern fund's CSI 500ETF, all of which are the largest and most liquid in their respective market segments. Of course, large scale is not necessarily the best. Veterans sometimes buy small ones and some earn new ones.
There are two problems with the broad base index. First, it is difficult to have excess returns, which depends on the individual's risk preference, because some people just want to get the average market returns; The second is that fluctuations are uncontrollable. It has been said before that in the past two years, the GEM index has hanged 95% of its active rights, so what active rights should it buy? The problem is that the growth enterprise market index fluctuates greatly, the bull market rises much, and the bear market kills quickly.
In short, the holding experience of broad-based index is actually not so good, not to mention taking profit and timing when making broad-based index. For beginners, the uneven income curve makes the holding experience of broad-based index more general, and it is very difficult for beginners to miss the income if they don't know how to grasp the opportunity.
Index funds are not suitable for the strategy of "buy and hold for a long time", but fund companies generally don't tell you when to take profits, and in most cases they will recommend you to vote. Fixed investment is another grand topic, so I won't talk about it here. I mentioned an example of a friend before. When I bought the Efund SZSE 100 index, it didn't move for almost 10 years (I forgot to have this account) and found that the yield was less than 20%. In the same period, Efund's small and medium-sized income has almost caught up with Beijing's housing price increase (of course, it still can't catch up).
In fact, there is no need to introduce the broad-based index to novices, and low rates are not a selling point. Why are you still struggling with the price difference after buying the rights?
Besides, industry index funds actually hide bigger pits (more difficult to invest). I did some grass-roots research and found that liquor, chips and new energy are standard for many people. Liquor is relatively better (it hasn't fallen much for so many years, so it's difficult to adjust back recently), and chips and new energy are the hardest hit areas.
I'm not saying that you can't buy an industry index, but I don't recommend buying it for beginners unless two conditions are met:
First, you have a clear understanding of the sub-sectors you invest in and know why this industry can rise;
Second, you should have the consciousness of actively choosing the right time, and know when you can add positions and when you should take profits and sell them.
Even if you meet the first condition, I recommend you to buy an active stock fund with an industry theme (in most cases). Take medical care as an example. Last year, the overall index of the pharmaceutical industry rose by about 50%, but the active income of the best-performing pharmaceutical theme in the industry almost doubled, and the excess income was above 50%. I also consulted the fund manager of medicine face to face, and got the answer that there are not many companies that the pharmaceutical industry can buy, and the leading companies with good quality will be over-allocated, and those with poor quality will only buy indexes, so the excess return of active funds relative to industry indexes is very obvious.
Why is liquor so strong? Due to the small number of targets and the significant proportion of leading companies (a single stock can exceed the down limit of 10%), the performance of CSI Liquor Index may be better than that of many funds with heavy liquor positions.
Of course, even active equity funds with industry themes are not necessarily suitable for long-term holding, because we can't predict the direction of plate rotation in most cases, and it is very dangerous to bet on one industry for a long time. For example, the media industry has been in a long-term downturn in previous years. If you buy active equity in the media theme, it is difficult to earn more money than the market average.
For a period of time, if an industry performs well, the basic people will chase after it and make trend investment. Some industries have a strong market persistence, and some markets end in a few weeks, so it is easy to get stuck. Of course, if you have a strong belief in an industry, you can forget it. For example, your cognition tells you that liquor/medicine/new energy is the future cattle industry, and you can hold it for a long time or make a fixed investment after buying it.
Back to the topic, why not recommend novice citizens to buy index funds? The most fundamental thing is that active equity funds can easily outperform the index because of the large number of retail investors, imperfect derivatives tools and a large number of alphas in the A-share market. The index of American market is hard to beat, because their capital market development stage is very different from ours. With the continuous improvement of our capital market, it may eventually become very similar to American stocks, but this process is quite long. Before that, we can enjoy the alpha of the times through active stock funds.
You can go and see for yourself. There are many large factories that do well in active rights and interests than those that do well in passive indicators. Speaking of excellent active public offering companies, you will think of Yifangda, the industry leader and the third largest winery in the world, taking the boutique route and rarely distributing products. Every year, several products can impact Guangfa, All-Star lineup and Central Europe with complete styles. But when it comes to the index, except Huaxia, other companies such as Tian Hong, Huatai Bairui, Guotai, Huaan, etc. actually have a low sense of existence in the eyes of the public (Note: individuals don't argue with me. Think for yourself. In addition to China Merchants CSI Liquor, several index funds are particularly famous.
Moreover, now is the IP era of fund managers. It is difficult for index fund managers to find a sense of existence and do personal IP, because passive investment mainly depends on the track, not how fund managers choose stocks. In other words, the resignation of the index fund manager will basically not affect my investment; However, the resignation of active equity fund managers needs attention in most cases.
How difficult is the IP of index fund managers? For example, in recent years, I have always liked to grow up creatively and be a band on the field. It took me a long time to know that the fund manager of this index is Rong Rong, and she is still a beauty. And Liu Jun, an index tycoon who won the Golden Bull Award seven times. You may not know that he is the head of the largest Shanghai and Shenzhen 300 Index. Of course, everyone will be familiar with Hou Hao, Luo Guoqing and Xu Zhiyan because they actively communicate with the market. But if you look at active fund managers, do you need to say more? Even though Zhang Kun hasn't said a word in recent years, it doesn't prevent him from becoming the top player in the industry and the first person to have a fan support club. Noan Caibo, who doesn't talk much, made dozens of hot searches last year.
Public Offering of Fund's exponential trajectory naturally has a disadvantage in publicity. To put it bluntly, index funds are not for people to play, but for investors to trade, and they are tool products. Why are our index fund companies generally weak, or is it because there are too many alphas and too strong initiative, which leads to poor index, poor broad-based index and no quantitative investment?
Of course, I am not denying the value of index funds. I want to make it clear what I'm talking about: for novice citizens.
What are we buying funds for? Why don't you think less about how to invest and let those smart people work for us? If the fund manager who actively defends rights loses one more hair, we can lose one less hair.
Therefore, it will be a simple and effective strategy to choose excellent market-wide active funds, buy them and hold them for a long time. Choosing an industry to change careers naturally has someone to help you, so don't worry about how long the pro-cyclical market can last. Even if you forget your account, it won't be too bad to open an estimated income ten years later (provided that the fund you bought is really excellent, which is also lucky, and the possibility of diversification may be greater).