Index fund is a fund variety that grows synchronously with the target index on the principle of fitting the target index and tracking the change of the target index. \x0d\ Index fund is different from other funds in that it tracks the performance of stock and bond markets and follows a stable strategy. Its advantages in the securities market not only include effectively avoiding unsystematic risks and low transaction costs, but also have the characteristics of less monitoring investment and simple operation. Specifically: \x0d\ 1, with low cost. This is the most prominent advantage of index funds. Expenses mainly include management expenses, transaction expenses and sales expenses. Because index funds adopt holding strategy, there is no need to exchange shares frequently, and these expenses are far lower than those of actively managed funds. Although this is a small absolute difference, the cumulative result will have a great impact on the fund's income for a long time because of the compound interest effect. \x0d\ 2。 Disperse and prevent risks. On the one hand, because index funds are widely diversified, the fluctuation of any stock will not affect the overall performance of index funds, thus diversifying risks. On the other hand, because the indexes pegged by index funds generally have a long tracking history, the risks of index funds can be predicted to some extent. \x0d\ 3。 Deferred tax payment. Because index funds adopt the strategy of buying and holding, the turnover rate of the stocks they hold is very low. Only when a stock is removed from the index, or when investors demand to redeem their investments, index funds will sell their stocks and realize part of the capital gains. In this way, the capital gains tax paid every year is very small (in developed countries such as the United States, capital gains belong to the category of income tax). Coupled with the compound interest effect, delaying tax payment will bring many benefits to investors.