1. The full name of generalized fund is generalized index fund. The so-called broad-based index refers to the index that spans different industries. For example, Shanghai and Shenzhen 300 and CSI 500 are broad-based indices. The constituent stocks of this kind of index cover a wide range, including many types of industries, and the risks are more dispersed. Funds that invest in broad-based index are broad-based index funds.

2. Broad-based index funds correspond to narrow-based index funds. Narrow base index refers to an index limited to a certain industry, such as military ETF, bank ETF, real estate ETF and environmental ETF. Compared with broad-based index funds, narrow-based index funds have more concentrated risks.

3. Whether it is a broad-based index fund or a narrow-based index fund. It can reduce the risk of stock fluctuation and avoid the process of stock selection. Buffett once said in 2007 that for the vast majority of small and medium investors who have no time to study the fundamentals of listed companies, low-cost index funds are the best choice for them to invest in the stock market.