A broad index fund is a fund that invests according to a certain index. Its name "generalized index" comes from the index tracked by its fund portfolio, which usually involves a wide range of market sectors and asset classes, including stocks, bonds, real estate, commodities and so on. Wide index funds are usually passively managed because their portfolio composition depends on the tracked index, not the subjective decision of the fund manager.
Characteristics of broad-finger funds
1. Diversification: Wide index funds can diversify their investments into multiple industries and asset classes by tracking a wide range of market indexes, thus reducing the risk of their portfolios.
2. Low cost: Wide index funds usually adopt passive management strategy, and do not need to hire fund managers with high salaries, so the management cost is relatively low, which can provide investors with better returns.
3. Convenient trading: Broad-finger funds can be listed and traded on the stock exchange, and investors can buy and sell at any time, which improves the flexibility and liquidity of investment.
4. High transparency: the investment portfolio of broad-based funds is open and transparent, and investors can check the fund's positions and investment strategies at any time.
Generalized fund principle
1. tracking index: the portfolio composition of a broad index fund depends on the tracked index, and no subjective decision is made.
2. Diversification: Broadly, it means that funds diversify their investments and reduce risks by tracking various asset classes and industries.
3. Low management cost: Wide-index funds usually adopt passive management strategy, and do not need to hire fund managers with high salaries, so the management cost is relatively low.
4. High transparency: the investment portfolio of broad-based funds is open and transparent, and investors can check the fund's positions and investment strategies at any time.
In a word, the broad index fund is a fund that tracks a wide range of market indexes to realize its portfolio, which is characterized by diversified investment, low cost, easy transaction and high transparency. Investors can realize low-risk, low-cost long-term investment income by choosing a wide-index fund that suits them.