1, index fund, as its name implies, is a fund product with specific indexes (such as Shanghai and Shenzhen 300 Index, Shanghai Stock Exchange 180 Index, Shenzhen Stock Exchange 100 Index, etc.). ) as the target index, and take the constituent stocks of the index as the investment object, build a portfolio by buying all or part of the constituent stocks of the index, and track the performance of the target index. Generally speaking, the index fund aims to reduce the tracking error, make the change trend of the portfolio consistent with the underlying index, and thus obtain roughly the same rate of return as the underlying index.

2. Different index funds have different income and risk expectations, so we should choose different underlying indexes to meet the investment needs of the funds. We can choose an index that reflects the whole market as the tracking target to obtain the average return of the market, or we can choose a specific type of index (such as large-cap stock index and growth index) as the tracking target to obtain the corresponding return on investment under the premise of taking corresponding risks.

3. Classification by replication method

* Fully replicated index fund: strive to allocate according to the composition and weight of benchmark index, with the goal of minimizing tracking error.

* Enhanced index fund: On the basis of allocating most assets according to the weight of benchmark index, some assets are also used for active investment. Its goal is to get higher income than the benchmark index while closely tracking the benchmark index.