What does index fund mean?
Usually track the fund products of an index, invest in the constituent stocks of the index, and track the performance of the underlying index by purchasing all or part of the constituent stocks of the index. This is easy to understand, because we can know that the investment scope of index funds is stocks, so index funds are also called stock funds.
What are the classifications of index funds?
Index wide fund: the stock coverage is wide, and the selected stocks are distributed in many industries.
Narrow index fund: The stock of a certain industry is used as the index of sample stocks, so the obvious risk will be greater than that of wide index funds because the investment is relatively concentrated.
What are the benefits of investing in index funds?
1. I feel that I need to track this index of the stock market when I set foot in the stock market. This is a good learning opportunity before entering the stock market.
2. If the positions are scattered, the risk will be lower than buying stocks.
Some suggestions on investing in index funds
1, investment target: analyze the characteristics of the corresponding index, and then judge whether it has rising potential before buying.
2. Tracking error: the change of index fund net value is closely related to the change of index. Through the fund report, we can analyze the tracking error of index funds from the performance of fund net value.
3. Buy the right one: There are many kinds of index funds, including closed, open, index ETF and index LOF, each with different characteristics. When buying index funds, you must choose the one that suits you best, and don't blindly follow suit.
As you can see, no matter what fund you buy, it is necessary to read its file carefully before buying it. Moreover, the risk of index funds is relatively high. Novice Xiaobai suggested that we can start investing in more basic money funds and bond funds. After you have some investment experience, start with high-risk index funds.