An index fund is a fund that tracks indexes. There are many kinds of index funds, and broad-based index funds are one of them. So what is a broad-based index fund? The following is what Bian Xiao prepared for you. Welcome to read the reference!

What does broad-based index fund mean?

Broad base index and narrow base index are a set of relative concepts. Compared with the narrow-base index, the broad-base index fund refers to CSI 300 and CSI 500, while the narrow-base index fund refers to various industry indexes, such as CSI Liquor and China Shipping Medical. We can simply sum it up in one sentence, that is, it covers a wide range of industries, so it is a broad-based index.

Generally speaking, the broad-based index covers a wider range of industries, so its benefits and risks will be more dispersed than those of the narrow-based index fund. According to the different investment targets, it is divided into large-cap index funds, such as SSE 50 and CSI 300. The market value of constituent stocks is relatively large, so the fluctuation is relatively small. Small and medium-sized index funds, such as CSI 500 and GEM, have small market value, relatively high risk but stronger growth.

When investing in broad-based index funds, it should be noted that many index funds will have a large number of duplicate shares, and there is absolutely no need to repeat investment.

Generally speaking, the broad-based index fund is mainly a reflection of the overall market, and it is a good fixed investment choice, which is very suitable for novices and people with poor basic selection ability to invest. However, it should be noted that when investing in broad-based index funds, we must pay attention to taking profit at the right position, and do not need to completely clear the position, but we must reasonably control the position and increase investment when the market is not good.

What is a broad-based index fund?

Broad-based index fund refers to the index fund that tracks the broad-based index to invest, in which the broad-based index refers to a broad and representative index. For example, in China's stock market, the Shanghai and Shenzhen 300 Index, the CSI 500 Index and the Growth Enterprise Market Index all belong to the broad-based index. Broad-based index usually includes many industries, markets and asset classes, which can reflect the trend and risk of the overall market. Broad-based index funds mainly track the performance of a broad-based index, and copy the returns and risks of the index by holding index constituent stocks or adopting other means.

Is it worth buying?

There is no absolute answer to whether broad-based index funds are worth buying, depending on the investors' goals, styles, investment duration and other factors. Broad-based index funds are more suitable for investors who pursue diversification and balance. For those investors who want to seek investment opportunities in different industries and markets, buying broad-based index funds can help them better share the cost of capital and reduce investment risks.

It should be noted that investing in broad-based index funds is not without risks. When investors buy broad-based index funds, they also need to pay attention to the fact that buying broad-based index funds does not guarantee returns. The return and risk of a broad-based index fund depend on the performance of the index it tracks. If the index falls, the broad-based index fund will also fall, and investors may face the risk of principal loss.

In addition, the broad-based index fund may not be able to completely copy the index, and there may be some tracking errors in the actual operation of the broad-based index fund, that is, the performance of the broad-based index fund is different from that of the index it tracks, which may affect the expected return of investors.

What is the difference between a broad-based index fund and a narrow-based index fund?

Broad-based index funds are relative to narrow-based index funds. The so-called broad-based index fund refers to a fairly representative index fund covering a wide range of stocks. Broad-based index fund can be said to be an index fund that integrates many industries.

For example, the Shanghai and Shenzhen 300 Index, which we often hear about, is to choose the 300 companies with the largest market value among listed companies in Shanghai and Shenzhen; There is also the CSI 500 Index, which refers to the companies developed by CSI. Excluding the top 300 companies with the largest market value in Shanghai and Shenzhen markets, the next 500 companies with the largest market value are listed. These companies include various industries.

The biggest feature of broad-based index funds is that there are more samples of constituent stocks behind them, so the trend and fluctuation are more stable. Therefore, it tracks the economic cycle more stably.

For broad-based index funds, it is perfect to open positions at the end of the bear market and the beginning of the bull market. Because the broad-based index fund has an obvious feature: the bear market has a relatively large decline and the bull market has a relatively large increase. Therefore, it is normal to choose a position at the bottom of the bear market. The bull market is coming, and it is normal for your assets to double.

Broad-based index fund

1, broad base index relative to narrow base index. Broad-based index funds refer to CSI 300 and CSI 500, while narrow-based index funds refer to various industry indexes, such as CSI Liquor and China Shipping Medical. The best use of broad-based index funds is the fixed investment of funds. According to the different investment targets, it is divided into large-cap index funds (SSE 50, CSI 300, etc. ), small and medium index funds (CSI 500, GEM index, etc. ), and index funds are fixed. Just choose one for each fund. Repeated selection will not increase income; Choose one for the large market and one for the small market, which is similar to the combination of "CSI 300+ CSI 500" or "SSE 50+ CSI 500"; Fuer privately believes that powerful investors are equipped with broad-based index funds as standard.

2. The style of active funds may be ever-changing. Narrow-based index funds follow the hot spots, while broad-based index funds always have their own fixed usage scenarios.

3. Wide foundation is controllable, which can give full play to your subjective initiative. It's like you have your own stage now, and all the facilities are complete. You just need to choose the actors and props you want to use and start the performance directly.

4. Therefore, the use of broad-based index funds is particularly important, which can not only exercise your investment ability, but also optimize your position ~ Practice tells you the truth. Let's take a look at the ups and downs of several mainstream broad-based indexes over the years-actions speak louder than words, and practice tells you the truth: red represents the rise of that year, and green represents the decline of that year. Source: wind cough, too many years, maybe tired, and the second is to wink at you: SSE 550. In the year of ups and downs, the performance of large-cap index and small-cap index is different. When CSI 500 and GEM fell, SSE 50 and CSI 300 rose. There have been several big trend years in history, and several mainstream indexes have risen and fallen together, but the magnitude is different.

5. In the same year of increase, the CSI 500 and GEM index increased even more; When they fell together, SSE 50 and CSI 300 fell relatively more.

6, gold is not enough, no one is perfect, if this is a pk competition system, the audience will probably stand up after reading it-can I choose neither? Aren't they all green in the end? Fortunately, we have God's perspective and are sacred buyers. We can have our cake and eat it.

7. Index products are called tool products because they can be used by us as tools. ~ picking one is obviously not enough. If you hold a single type of index or the same type of index, the investment pressure will be very great.

8. In order to achieve risk hedging, the best way is to choose different indexes for diversification. It is suggested that large-cap stocks and small and medium-sized stocks should start with some.

9. First of all, CSI 500 and CSI 300, which have the highest recognition, have no heavy positions, representing market value and mid-range growth respectively. Therefore, there are many funds investing in these two indexes in the market.

10. For novice investors, you may wish to make a moderate choice: add both CSI 300 and CSI 500 to your own fund pool, and the ratio of the two can be fine-tuned according to market tastes and personal tastes.

1 1, the yield is not necessarily excellent, but it can basically be less embarrassing.

12, SSE 50 and GEM, these two indexes overlap with the positions of CSI 300 and CSI 500, but one is a super-large-cap stock and the other is a particularly small-cap stock. Many times, the strength is clear. You go up, I go down, I go down, you go up. Limited market active funds switch back and forth between large and small stocks.

13, just like the seasonal change and the stock market style rotation, is a good time for these two indexes to appear.

14, sometimes it's the spring of a big blue chip like SSE 50, and sometimes it's the best time for the growth of GEM, so you can't miss the opportunity as soon as it appears.

15 Of course, some people actually want to save trouble. You can choose a dividend index.

16, the dividend index is stable, and it is suitable for long-term holding to obtain dividends.

17. As can be seen from the table, the interval income of CSI dividend is basically stable compared with other indexes that jump up and down. When the market is good, it often jumps very hard, and when the market is bad, it is not the bottom. On the whole, the risk-return ratio is better.