I. Overview of the fund market
According to the data of Eastern Fortune Choice (Figure 1- 1), at present, monetary, hybrid and bond funds are the main types in the fund market, accounting for 37%, 25% and 22% respectively, and the total proportion of the three types of funds exceeds 80%. Other types of funds include stocks, indices and QDII. Among them, QDII funds refer to funds invested by mainland residents in Hong Kong or overseas assets, and refer to securities investment funds established in a country and approved by the relevant departments of that country to engage in securities business such as stocks and bonds in overseas securities markets.
Second, index funds.
Index funds are divided into six categories: general index, index enhancement, ETF, ETF connection, LOF and graded funds. Except ETF, other funds can be traded over the counter (LOF can be traded on the floor or over the counter).
1. OTC general index fund
OTC general index fund is the most traditional index fund. ETF was listed for the first time in China in 2005. Before that, it was all such OTC general index funds, such as E Fund Old SSE 50 Index Fund 1 10003. Ordinary index funds have the longest history and the most convenient transactions. However, if the position is not satisfied, generally at least 5% of cash should be reserved to deal with redemption. So the increase will be slightly smaller than the index, and the decline will be slightly smaller than the index.
2. Exchange-traded open index funds
ETF adopts a unique way of applying for redemption in kind, and can also support floor trading. But as far as its liquidity is concerned, except for large-scale ETFs, many ETFs in the market are very poor in liquidity, and may only trade tens of thousands of yuan a day.
3. Index-enhanced funds
In addition to tracking the index, index-enhanced funds also hope to provide investment performance higher than the return level of the target index, that is, to obtain excess returns. In order to achieve this goal, fund managers flexibly use various strategies to optimize their portfolios within acceptable deviations. Because of the different enhancement purposes of different products, there is no unified model for enhancing index investment, but the starting point is to outperform the index. Because it is not completely tracking the index, the redemption rate is higher than ETF, but lower than actively managed funds. Moreover, in the inefficient A-share market, it is indeed possible to obtain excess returns.