There are many standards for index classification, and the indexes in the market can be basically divided into three categories, namely, comprehensive index, broad-based index and narrow-based index. However, we often say that industry index funds or theme index funds can be divided into narrow basic indexes, and there is no absolute division standard.
Composite index refers to the index that can reflect the rise and fall of the whole market. For example, Shanghai Composite Index and Shenzhen Composite Index are typical composite indexes. Broad-based index is an index that can represent a certain range of stock market trends, such as SSE 50 Index, CSI 300 Index and CSI 500 Index.
Industry index means that constituent stocks come from a specific industry or focus on a specific investment theme, covering industries and individual stocks more intensively, with higher investment risks and higher expected returns.
From the perspective of large industry classification, the industry index mainly includes 10 first-class industries. Judging from the actual data of A-shares, the consumption of necessities and medicine are the two best performing industries in history, because these two industries are naturally easy to make money and are also the key targets of our investment industry index.
In addition, besides 10 industry index, there are also some industry index funds that invest according to a certain theme, which can also be understood as narrower and finer industry index funds, such as liquor industry, environmental protection industry and military industry. There is also a dividend index, which mainly chooses stocks with high dividend yield. Four common dividend indexes, such as Shanghai Stock Exchange dividend, Shenzhen Stock Exchange dividend and dividend opportunity index, cover the companies with the highest dividend yield in Shanghai Stock Exchange and Shenzhen Stock Exchange respectively, with the number ranging from 40 to 100.