When investors invest in funds, they will find that many fund products have an "enhanced" word more than the familiar index funds. Enhanced index funds rely on maintaining the characteristics of index funds as much as possible in the direction of active investment, and obtain higher returns than the target index by adjusting individual stocks. So what's the difference between index-enhanced funds and index-based funds? Today, Bian Xiao will tell you something about this part.

The difference in investment ratio of index is the fundamental difference between index-enhanced funds and index-based funds.

explain

Guangfa Shanghai and Shenzhen 300 Index has expanded the investment scope of the fund: the proportion of stock assets investment is not less than 90% of the fund assets, and the assets invested in the constituent stocks and alternative constituent stocks of the Shanghai and Shenzhen 300 Index are not less than 80% of the stock assets; Investment scope of CGB CSI 300: The assets tracking the CSI 300 index shall not be less than 90% of the fund's net asset value.

In this way, 20% index-enhanced funds can use these 20% stock assets to realize the excess expected return of the index without investing in the underlying index, which is the connotation of enhancing the index.

Therefore, the different proportion of index investment will affect index tracking.

The manager of the index enhancement fund can try his best to ensure the index characteristics and realize the appreciation by adjusting individual stocks, and the index fund completely follows the underlying index. The higher the fitting degree between index fund and index, the better.

The management fees are also different. Index-enhanced funds have higher management fees because they rely more on fund managers.

The above is the relevant content of the difference between index-enhanced funds and index-based funds, and I hope it will help everyone. Warm reminder, financial management is risky and investment needs to be cautious.