The biggest risk of index funds is the loss of principal. The fund is not a capital preservation product, and there is the possibility of principal loss. Investors need to bear the loss of principal, and index funds also have the risk of liquidation. Fund liquidation is generally a performance reason. The worse the performance of the fund, the greater the probability of liquidation.

Index fund is a kind of fund, which tracks a specific index and buys all or part of the constituent stocks in the index to obtain the same income as the index. Index funds are relatively stable.