Index Fund, as the name suggests, uses a specific index (such as the CSI 300 Index, S&P 500 Index, Nasdaq 100 Index, Nikkei 225 Index, etc.) as the underlying index, and invests in the constituent stocks of the index.

The object is a fund product that builds an investment portfolio by purchasing all or part of the constituent stocks of the index to track the performance of the underlying index.

Generally speaking, the purpose of index funds is to reduce tracking error and make the change trend of the investment portfolio consistent with the underlying index, so as to obtain roughly the same rate of return as the underlying index.

There are four types of index funds. Closed-end index funds.

It can be traded in the secondary market, but cannot be subscribed or redeemed; a general open-end index fund.

It cannot be traded in the secondary market, but can be subscribed and redeemed; index ETF fund.

ETFs can be traded in the secondary market, and can also be subscribed and redeemed, but the subscription and redemption are in the form of combined securities; index LOF funds.

It can be traded in the secondary market, and can also be subscribed and redeemed.

Expanded information There are more and more index funds on the market, and it is becoming more and more difficult to choose. There are two points that investors need to pay attention to when choosing index funds. Choose funds that track indexes with better growth. It is not difficult to find such indexes.

It is inferior to choosing stocks; choosing to invest in index funds with smaller tracking errors. The smaller the tracking error of the fund, the stronger the management ability of the fund manager, and the better the investor can achieve the goal of obtaining index returns.