1. What is a broad-based index fund?
According to the standards of American securities institutions, the broad-based index generally needs to meet several conditions:
1) stocks containing 10 or above;
2) The weight of a single constituent stock shall not exceed 30%;
3) The cumulative weight of the five stocks with the largest weight does not exceed 60% of the index;
4) The average daily trading volume of constituent stocks exceeds USD 50 million.
The fund that tracks the broad-based index is the broad-based index fund, which can effectively spread risks and avoid the black swan of individual stocks by buying components to build a portfolio. Moreover, through the setting of weights, the risk of increasing holdings of a stock or industry can be reduced.
2. What broad-based index funds are there?
Common broad-based indices in China generally refer to: SSE 50, CSI 300, CSI 500, GEM, dividend index, Hang Seng Index, etc.
1, SSE 50
The SSE 50 Index is a sample stock composed of 50 stocks with the largest scale, good liquidity and the most representative in Shanghai Stock Exchange, so as to comprehensively reflect the overall situation of the most influential high-quality large-cap enterprises in Shanghai Stock Exchange.
The index is dominated by large-cap stocks; All stocks of Shanghai Stock Exchange; Most of them are financial blue chips, but the industry concentration is too high and they are easily influenced by the financial industry.
2. CSI 300
The CSI 300 was developed by CSI Index Company, and 300 stocks with the largest scale and the best liquidity were selected from Shanghai Stock Exchange and Shenzhen Stock Exchange. The number of its constituent stocks is more than 50 than that of the Shanghai Stock Exchange, and most of them are large companies. The companies included in the Shanghai and Shenzhen 300 Index account for more than 60% of the total size of the domestic stock market by market value, so the Shanghai and Shenzhen 300 Index is also considered as the most representative index of the domestic stock market.
The index is dominated by large-cap stocks, and the stocks of 300 large listed companies in Shanghai and Shenzhen stock markets. It is the most representative index of China stock market and is called the "barometer" of A-share market trend.
3. CSI 500
Exclude all 300 companies in the Shanghai and Shenzhen 300 Index, and then exclude the top 300 companies with average daily market value in the latest year. Among the remaining companies, the top 500 companies with daily average market value are CSI 500.
Judging from the industry distribution of CSI 500, the industries with the largest proportion are industry, information technology and raw materials. Judging from the top ten heavyweights, the proportion of each stock is not high, and the risk of the whole index being affected by a single stock is relatively small. The weight of traditional industries is not low, and the number of stocks in emerging industries is also quite large, which has great growth. The CSI 500 index has a higher increase, but its equity mainly covers small and medium-sized stocks in Shanghai and Shenzhen.
4. Growth Enterprise Market
GEM index selects 100 samples from GEM stocks to reflect the operation of GEM market. Most companies listed on GEM are engaged in high-tech business with high growth, but they are often established in a short time, with small scale and outstanding performance, but there is great room for growth.
5. Dividend index
Dividend index funds are composed of stocks with the highest dividend yield and the most cash dividends in the market. The four dividend indices are:
Shanghai stock exchange dividend index (0000 15):
50 stocks with high dividend yield, stable dividends, large scale and strong liquidity in Shanghai Stock Exchange were selected.
Shenzhen Stock Exchange dividend (399324):
40 stocks with stable dividends and high dividend yield in Shenzhen Stock Exchange were selected.
CSI Bonus (000922):
Taking 100 stocks with high cash dividend yield, relatively stable dividend distribution and certain scale and liquidity in Shanghai and Shenzhen A-shares as constituent stocks, the dividend yield is used as the basis for weight distribution.
S&p a-share bonus (CSPSADRP):
It is the A-share dividend index compiled by Standard & Poor's Company, and it is also a "network celebrity" among the four dividend indexes. Judging from the compiled rules, the dividend distribution of S&P A shares is relatively more reasonable, with more constituent stocks, including 100, and the industry distribution is relatively more balanced.
6. Hang Seng Index
The Hang Seng Index of Hong Kong is calculated based on the stocks of 50 listed companies in the Hong Kong stock market, and it is the stock index that can best reflect the price of the Hong Kong stock market.
Hang Seng Index is a very distinctive index with a long history, many derivatives and rich investment strategies.