What are the index funds? What kinds of index funds are there? The following small series will tell you.

Class I funds (index funds) adopt passive investment, choose an index as the imitation object, and buy all or part of the securities in the securities market contained in the index according to the index standard, so as to obtain the same income level as the index. For many investors, the investment method provided by index funds is the most convenient and simple.

Index funds can be roughly divided into the following three categories:

Types of index funds. Complete copy.

This kind of index fund generally replicates the index with 100%, and adopts a completely passive strategy without artificial interference. Of course, in practice, a fully replicated index fund, 95% of its funds are invested in stocks to replicate the index, and the other 5% is in cash for some investors to redeem.

Type 2 of index fund. Enhanced.

This index basis constructs an enhanced design to appropriately increase or decrease the holdings of the components in the index. To put it bluntly, although the investment is still included in the index, there are some artificial adjustments and changes in the investment ratio.

Types of index funds. Optimize funds.

In addition to tracking the index, this index fund will also invest in some stocks that are not included in the index, which can be said to be more impure than the enhanced index and more human interference factors.

Whether it is enhancement or optimization, their goal is to surpass the performance of the index itself, which may be effective in a short time, but it is impossible in the long run. For fully replicated index funds, the transaction times and transaction costs are relatively low, and at the same time, because of passive management, the management costs are also the smallest. In addition, it will generally maintain full investment and will not speculate on the market because of impulse.

The diversity of index funds is increasing, and the subdivision can be divided into the following five categories:

Subdivision of index funds I. Scale index funds

Scale index is an index based on market value and weighted by market value. The index fund with the scale index as the tracking target is the scale index fund. Scale index fund is the main type of early index fund in China. The existing scale index funds mainly track CSI 300, SZSE 100, CSI 100, CSI 500, SSE 50, SME board index and GEM index.

Index fund segmentation II. Style index fund

Style index is an index constructed by analyzing growth factors and value factors to determine the composition goals. The index fund that tracks the style index is the style index fund. The existing style index funds mainly include index funds that track the Shanghai and Shenzhen 300 growth index, the Shanghai and Shenzhen 300 value index, the Shanghai 180 growth index and the Shanghai 180 value index. Taking the Shanghai and Shenzhen 300 Growth Index as an example, we select 100 stocks with the best growth ability from the Shanghai and Shenzhen 300 constituent stocks for construction. At present, the advantages of the index are low valuation and excellent growth ability.

Index fund subdivision three. Industry index fund

Industry index is an index that sets the goals in a single or a few industries as constituent goals. The index fund that tracks the industry index is the industry index fund. The existing industry index funds include index funds that track the Shanghai and Shenzhen 300 financial real estate index, Shanghai financial stock index, Shanghai financial real estate industry index, Shanghai energy industry index, Shanghai medical and health industry index, Shanghai raw materials industry index and Shanghai major consumer industry index.

Subdivision of index funds. Theme index fund

Theme fund is an index constructed by determining the composition target from the perspective of a specific theme. Compared with industry index funds, many theme index funds have a wider industry distribution. The index fund that tracks the theme index is the theme index fund. The existing theme index funds include index funds tracking 50 private enterprises in Shanghai Stock Exchange, Shanghai and Shenzhen 300 non-periodic index, Shanghai emerging industries index, Shenzhen Stock Exchange dividend price index, Mainland China low-carbon economy theme index, Shenzhen Stock Exchange consumer service leading index and so on. Theme index funds are diversified, and investors need to know their allocation direction and the characteristics of component targets when choosing such funds.

Subdivision and strategy of index fund

The strategy index is an index constructed according to a specific strategy, including the selection strategy and the weight strategy of the target. The index fund that tracks the strategic index is the strategic index fund. The existing strategic index funds include index bases based on fundamental indicators, such as Harvest Fundamental 50; Fingerbase constructed according to equal rights strategy, such as Yin Hua CSI with equal rights 90; According to the allocation strategy of stock bonds, such as Yin Hua CSI Growth Stock Bonds.

What if we look at the types of index funds? In fact, by looking at the basic information of the fund, we can see its investment objectives and investment philosophy.

For example, Great Wall Jiutai CSI 300, with the code of 200002, is an index fund, and it is indicated in the investment target: tracking the target index by enhancing the indexed investment method; And there are also expressions in the investment concept: mainly indexed investment, supplemented by moderate active management. These data all show that Great Wall Jiutai CSI 300 is an enhanced index fund.