In fact, there are differences in the rates of general index funds, enhanced index funds, index grading funds, ETFs and ETF-linked funds, such as management rates, sales service rates and custody rates. Be careful when choosing.
Among them, the handling fee for Class C products is 0 after 10% discount on the platform, and others range from 0. 1% to 0. 15%. Other rates are also different. When buying a fund, you must look carefully and understand what costs you need to bear directly. There is a redemption fee of 1.5% if you hold it for less than 7 days. Don't use OTC funds for short-term speculation.
From the perspective of fund types, the comprehensive rate is basically ETF and ETF-linked funds, while the enhanced index funds have higher rates. Because the management rate of enhanced index funds is relatively high.
In addition, compared with bank channels and brokerage channels, it is recommended that you buy funds from third-party sales platforms or fund companies in official website, because the subscription rate will be much cheaper. Especially for the base people who make a fixed investment, because each deduction is equivalent to subscription, it is necessary to actively choose index funds with low subscription rates, which can also save a lot of money in the long run.
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Second, pay attention to the tracking error.
Tracking error refers to the gap between index fund performance and index performance, which can reflect the management ability of fund managers. Of course, the smaller the tracking error, the better. Judging from the current market situation, it is best to choose an index fund with a daily tracking error of 0.2% (annual tracking error 1.5%).
Generally speaking, the tracking error mainly comes from the following situations:
(1) Replication error. Because index funds cannot completely replicate the structural deviation caused by the underlying index allocation structure.
(2) Cash retention. Open-end index funds must keep a certain proportion of cash to prevent redemption.
(3) Management fees and other expenses. The higher the cost, the greater the tracking error.
(4) Dividend distribution. There are differences between ETF and benchmark index in dividend distribution quantity and registration distribution time of constituent stocks.
(5) valuation effects. Tracking error caused by different valuation models of inactive constituent stocks in the benchmark index.
It is suggested that you should choose an index fund whose daily tracking error is controlled within 0.2% or whose annual tracking error is within 1.5%. Specific tracking error data, you can see the fund's variety page.
Third, pay attention to constituent stocks.
For industry index funds or theme index funds, we should also pay attention to the problem of constituent stocks. The index of the same industry, its subdivision is different, we should pay attention to the investment style of the relevant index when choosing, and then make a choice according to the market wind direction.
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Fourth, identify the target of index fund tracking.
The investment goal of index fund is to get the same income as tracking index, so choosing a suitable index is the key to investing in index fund.
In terms of investment methods, if investors choose fixed-term quotas and intend to hold them for a long time, it is suggested to choose cross-market broad-based indexes, such as SSE 50 and CSI 300, which are characterized by high market value coverage and can strive to obtain stable average market returns. Some investors are sensitive to market style, so they can choose SZSE 100 index and CSI 500 index for band operation. Generally speaking, even considering the disturbance of the economic cycle, the market will grow with the economic growth in the long run, so investors will get relatively stable returns on their investment.
Fifth, compare the companies affiliated to each fund.
Index funds are passive investments, and the operation is relatively simple. However, the analysis and research of its tracking benchmark index is a complex process, which requires accurate calculation and rigorous operation flow. The stronger the fund company, the higher the investment cost and the higher the investment level.
Sixth, clearly face the graded fund.
For graded index funds, investors need to have a clear understanding of the size of leverage and the tracked index, so as to control risks well.
Generally speaking, graded index funds are divided into priority shares and enterprising shares, and the matching ratio of the two will be stipulated in the fund contract, which determines the index magnification. The heavier the proportion of preferred shares, the more obvious the amplification effect of leverage, and the more risks investors need to bear. Of course, if the index goes up, the income will also be enlarged. In addition, the fluctuation range of the small and medium-sized board index is often greater than that of the market index, and these factors will be amplified in different degrees in leverage.
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Seventh, pay attention to the investment index of the fund.
Before buying an index fund, we should observe the index of the fund's investment and analyze what kind of stocks or industries it trades, which include large-cap blue chips and which include small and medium-sized stocks and growth enterprise market. If you are optimistic about which one, increase the purchase ratio. In short, pay attention to observation before buying.
Eighth, pay attention to the theme and industry development behind the purchase of index funds?
If you want to benefit from investment, you should believe that its future development prospects are worth looking forward to when choosing industry funds. The trend of its index funds depends on the development of the industry and related policies. Therefore, investors should not look at the trend unilaterally or analyze the future trend of the industry.
Ninth, pay attention to the historical performance of index funds.
Investors should be aware that even the same index fund, the return on investment of each fund is different, which mainly depends on the different investment methods and research capabilities of the fund. A fund with good historical performance is the fund that will enable you to get higher returns in the future.