However, with the increasing popularity of index funds, more and more investors have joined the ranks of investment index funds.
And more white people don't know how to choose index funds. Like a headless fly, I can't find my way at random.
I also talked about what an index fund is in the last article. If you have friends who don't understand, you can read the last article.
First of all, the bell takes you to understand the classification of index funds. Let the monks who are not in your second grade be puzzled.
Index funds are mainly divided into "broad-based index funds" and "industry index funds".
What is a broad-based index fund?
It is in the index screening that stocks from all walks of life are occupied, and they are not limited to any industry, so they are called "broad-based index funds".
Just like Shanghai and Shenzhen 300, SSE 50, CSI 500, Hang Seng Index, etc.
These are broad-based index funds.
One of the main advantages of broad-based index funds is that they cover a wide range of industries and are evenly distributed. The income is also relatively more stable.
What is an industry index fund?
That is, index screening only accounts for one industry and is limited to one industry, which is called "industry index fund".
For example, the CSI Consumer Index, which represents the consumer industry, and the CSI Liquor Index, which represents the wine industry, are both called industry index funds.
However, investing in industry index funds has one disadvantage. Because the industry index fund only selects one industry as the index screening. So the fluctuation will be very large.
For example, if you buy the CSI Liquor Index Fund, if the liquor industry is particularly good this year, then the CSI Liquor Index will increase greatly. On the contrary, if the liquor industry plummets this year. Then the CSI liquor index will also be greatly affected, showing a downward trend.
Because there are many uncertainties in industry index funds, the corresponding risks are also increasing.
Now we know the difference between broad-based index and industry index. Relatively speaking, broad-based index funds are safer and more stable than industry index funds.
In addition, index funds can be divided into "fully replicated index funds" and "enhanced index funds" according to replication methods.
What is a fully replicated index fund?
It is to completely copy and track all the constituent stocks held by the target index in order to obtain similar returns to the target index.
However, due to the change of investment ratio and the trend of actual index, there will be some deviations. So the gap is very small. It can also be said that the probability of exceeding the index is very small.
What is an enhanced index fund?
That is, in addition to copying the target index, fund managers will also add some self-subjective investments. Achieve high returns beyond the target indicators.
However, it also increases the change of the relative index, which may bring investors higher returns than the index and may also lead to lower returns than the index.
Then, in these two index funds, the comparison results are very similar to those of passive index funds and active index funds mentioned in the previous article.
Whether it is a fully replicated index fund or a passive index fund, it keeps up with the footsteps of large troops and does not fall behind.
As well as enhanced index funds and passive index funds. It is possible to keep up with the big troops or fall behind.
Of course, the major index funds mentioned above cannot represent all types of index funds. There are other small-scale index funds, but the index fund shared by Bell is the most common and has a large number of buyers.
Then I will continue to share with you what subdivided index funds are.
Now that we have a general understanding of several categories of index funds, we also know that wide-base index and full-copy index are relatively safest, so how should we choose among so many index fund companies?
You can't buy all kinds of buy buy as soon as you enter the mall, can you
Of course not, just like we buy a commodity. Always choose the one that suits you best.
So how to choose? Bells teach you three steps.
Look at the picture below
These are the three steps that Bell will share with you today.
In the above article, the bell took you to understand several major classifications of index funds. Then friends should now know which index fund to choose and which is more suitable for them.
No matter which index fund you choose, as long as the index fund keeps the upward trend, you can choose it as the investment object.
A very powerful fund company plays a vital role in the future development of index funds.
Regardless of experience or capital, powerful fund companies are stronger than other small fund companies. Therefore, it is very necessary to choose a large fund company first.
At present, the domestic fund companies that basically exceed10 billion cannot be underestimated. If you want to choose a strong fund company, then it is most reliable to choose a fund company with a company scale of more than 654.38+000 billion.
① year of establishment
The fund company has been established for more than 3 years, so it can compare the data well and analyze whether the fund company's past performance ability is good.
Then there is no relevant data to compare and analyze the fund companies that have been established for a short time. We can't predict his future development trend. After all, our investment fund considers the long-term rate of return.
② Tracking error rate
The tracking error rate must be as low as possible because the lower the error rate, the closer the fund is to the tracking index.
At the same time, it can also stabilize the corresponding income of the fund tracking index, so that the risk brought by the error will be smaller.
③ Fund size
If the fund is small, the liquidity of funds will easily deteriorate. It also proves that the number of buyers is small, so the possibility of liquidation will be great.
Finally, it is easy to withdraw our fund by force, which leads to the interruption of investment funds. Bell suggested that the size of the fund should not be less than 300 million yuan, which is relatively safe.
④ Fund interest rate
Of course, the lower the fund rate, the better. The expenses of the fund are mainly divided into management fees, subscription fees, custody fees and redemption fees. Although most funds have little difference in rates.
However, after a long period of compound interest investment, a little interest rate difference will make a lot of money. I don't know how many times I can invest the money saved.
After Bell's above explanation, we can make a table of funds selected at different levels to compare the corresponding data of these four key points. This is clear at a glance. Choose the fund that suits you best.
If some friends are not sure where to find the information of these funds, I suggest you search "Tian Tian Fund Network" on the webpage. This website is relatively more convenient for your reference only.
Today, Bell will share with you several major classifications of index funds and three major steps in selecting index funds. I also hope that it will be of great help to everyone in Zhong's explanation. The above article is for personal understanding only. If there is any difference, please leave a comment below.
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