Index fund is a kind of fund with stock index as the target and the constituent stocks of the index as the investment object. It is a passive fund, which mainly tracks the performance of the index. However, many investors have encountered difficulties in choosing index funds.

How to select index funds?

1, preliminary screening. Investors should first exclude a kind of products with weak profitability, exclude small-scale products (under normal circumstances, the net asset value of the fund for 60 consecutive days will be less than 50 million yuan, which is at risk of liquidation), and exclude newly established products (novice investors had better choose products with rich experience and excellent historical performance).

2. Compare costs. Index funds use passive investment to copy index stocks in proportion to their weights. Generally speaking, the management fee of index funds is 0.5%- 1.0%, the custody fee is 0. 1%-0. 15%, and the redemption fee is 0.05%-0. 1%. Investors can try their best to choose low-cost channels and compare their choices in many aspects.

3. Analyze the tracking error. Due to various objective reasons, there will always be errors in the process of simulating the index. Investors should choose funds with smaller tracking errors, generally less than 4%. The tracking error can be queried in the quarterly report of the fund, or directly logged into Tian Tian Fund Network.

Many investors like the fixed investment of funds, and index funds are suitable for fixed investment of funds. After investors choose the target, they will make a fixed investment in the fund and get high returns. However, investors need to insist that the fixed investment period is not less than 1 year, and 3-5 years is appropriate.

Finally, remind investors that the fund is risky and investment needs to be cautious.