When the stock market breaks out, index funds tend to react quickly, while ordinary stock funds may fluctuate less.

On the other hand, index funds tend to maintain more than 90% position management, while ordinary equity funds have smaller positions. The stock positions of hybrid funds need to be determined according to the investment decisions of fund managers, and bonds and stock positions can be converted to each other. Fund managers need to be very clear about the ability to change market styles.

On the other hand, the index is generally divided into composite indexes such as SSE 50 and CSI 300, and industry indexes such as military industry, medicine and securities. When an industry is prosperous or strong, the returns of index funds often outperform other portfolios.

2. Index funds are simple and clear.

Index funds are easy to understand in trading instructions and are suitable for most ordinary investors.

Secondly, index fund investment provides a very low investment threshold, which saves the trouble of stock selection. Index fund needs less knowledge than stock investment, and its operation is flexible and convenient. As long as you know the difference between a bull market and a bear market, it is enough to judge the market trend. Usually, 1~2 years of investment experience, and a simple grasp of basic market knowledge is enough.

3. The cost of index funds is low.

The management fee of index funds is much lower than that of active funds.

4. Transparency of index fund investment.

Index funds are highly transparent. When investing in index funds, investors can clearly know the stocks behind them. Usually, the stocks tracked by index funds are fixed, and citizens can clearly know which stocks are allocated by the fund through software.