Who is the index fund buying community

For the fund to understand friends may have heard of the index fund, then, do you know the index fund buying group is who? Today, I will learn about the index fund with a piece of information about the index fund. I hope that you investors can help.

Index Fund (Index Fund), as the name suggests, is a specific index (such as CSI 300 index, S&P 500 index, NASDAQ 100 index, Nikkei 225 index, etc.) as the underlying index, and the constituent stocks of the index as the object of investment, through the purchase of all or part of the constituent stocks of the index to build a portfolio, in order to track the performance of the underlying index of the fund products.

Generally speaking, index funds aim to reduce tracking error so that the trend of the investment portfolio moves in line with the underlying index in order to achieve roughly the same rate of return as the underlying index.

Who is the index fund buying group?

(1) Investors who wish to share the fruits of China's economic and stock market development, but do not have much time to focus on stocks and the many active investment-oriented stock funds;

(2) Investors who have a certain degree of risk tolerance and wish to obtain average market returns over the long term;

(3) Small and medium-sized investors who wish to invest in a number of high-quality stocks and listed companies to form a high-quality investment portfolio but do not have much expertise in stock selection and timing;

(4) Investors who are more concerned about investment fees and wish to choose low-cost fund products;

(5) Long-term investors who wish to make fixed investment in funds, index funds are the best choice for fixed investment.

How to buy index funds?

First of all, we need to look at the underlying index fund tracking. The investment objective of an index fund is to obtain the yield of the underlying index. Therefore choosing a suitable index is the key to investing in index funds. There is no good or bad index, the main thing is to be compatible with their own asset allocation objectives. For example, if you want to invest in small-cap companies, you can choose a small- or medium-cap index fund; if you want to invest in a certain industry, such as financial real estate, etc., then the corresponding industry index fund is the main choice. For most investors who are bullish on the market trend in the long term and want to share the fruits of economic development through index funds, they can choose a representative mainstream index.

Second, carefully consider the rates of each fund. The rates here include the fund's management fee, custodian fee and subscription and redemption fees. Although the first two are not like subscription and redemption fees that investors have to pay out of their pockets, they are not to be underestimated as fees that are counted as part of the fund's assets. Overall, ETF and LOF index funds have a lower level of fees. Before choosing an index fund, investors should read the fund contract and prospectus carefully to understand the product features and fee levels.

Generally speaking, to buy index funds, you can go through the following ways: 1. directly to the bank counter to buy; 2. to each bank's online trading system for the purchase and sale of funds; 3. through the securities companies to buy and sell, in the brokerage firms to open the fund trading can be done by telephone commission; 4. in the fund company's website to trade can be 24-hour acceptance of the commission, unlike the purchase of the bank need to be subject to the limitations of the trading time; 5. If it is an ETF or LOF index fund, it can be bought and sold in the secondary market like stocks, which is more convenient. Generally speaking, in the bank to buy funds is not as good as in the fund website to buy funds, because the bank's fees are too expensive, if familiar with the network, it is recommended that the fund sales platform to buy, which is easy and convenient and save money (cheaper than half of the bank).

Before buying an index fund, you should first define your investment objectives in order to choose the type of index fund you want to invest in, and then carefully consider the rates of each, not to ignore the investment costs. It is also important to weigh the pros and cons in the way of subscription to save time and money for your investment.