Before Dana wrote about the topic of index funds, some fans asked Dana index funds how to choose, just recently CSI 500 performance is very strong, in all the broad-based index can be described as thriving, today use this opportunity to talk about the choice of index funds.
Index funds, Dana has always believed that this is a good choice for small white or people who do not have much time, even for some veterans, if you want to avoid the risk of a stock stepping on the thunder, then choose a suitable index fund, you can meet your investment needs.
According to the classification of investments, it can be roughly divided into broad-based indexes and thematic indexes.
Broad-based index, literally, is a relatively wide coverage, not limited to a certain industry, we often say that the wide-based index, there are Shanghai 50, CSI 300, CSI 500, ChiNext, etc., respectively, representing large-cap stocks, blue-chip stocks, small and medium-cap stocks and ChiNext stocks.
The theme index is an index composed of a certain industry or concept of thematic stocks, for example, if you want to buy pharmaceutical stocks, you can choose some pharmaceutical indexes, you have a special love for liquor, you can consider the liquor index fund.
So what is the overall selection of index funds?
The broad-based index is relatively balanced, and the thematic index is more suitable for band operations.
There is a phenomenon here, such as some time ago chip stocks rose very well, then naturally there are began to recommend chip index ETF, or liquor has been rising very well in the past few years, then the basic people who bought liquor ETF are naturally making a lot of money, but you must understand that most of these theme funds are rotated, when a certain period of time is too large, or obviously better than other varieties, these theme ETFs are the opportunity to make a profit, or at least, You don't go to buy liquor ETFs when you talk about liquor every day, what is the difference between that and chasing up stocks at a high level?
Wide-based indices are relatively more balanced than thematic indices due to the more sectoral sectors, but you should also pay attention to the rhythm of investing in them.
For example, the CSI 300 basically represents the white horse stock, then in last year's market, the CSI 300 index is obviously one of the best gains, because of the typical group stock market, but this year, the group stock continues to rise a lot less power, so in February this year, after the CSI 300 hit a new high, it began to fall all the way, because the group stock needs a long time to repair.
So what is the best performing index this year? CSI 500 Index.
CSI 500
CSI 500 is excluded from the CSI 300 and the top 300 stocks in market capitalization, the remaining top 500 stocks in market capitalization, in the past CSI 500 is basically synonymous with small-cap stocks, but with the overall rise of individual stocks, the number of mid-cap stocks in CSI 500 is also increasing. When Dana was last year, he suggested that friends choose the CSI 500, when the increase was far behind the CSI 300, but this year can be regarded as a raise of eyebrows, in the case of the index did not rise much, the CSI 500 is constantly setting new highs.
Why is that?
In fact, it is very simple, when the CSI 300 as the representative of the group stocks rose hugely, the demand for replenishment is easy to reach although not an absolute white horse, but it is also a very high-quality stock, and this target, that is, the CSI 500, plus the industry distribution of the CSI 500 is also very wide, the east is not bright and the west is bright, so you see unconsciously, the CSI 500 rose gratifyingly.
Speaking of which, Dana is not to let everyone continue to chase the CSI 500 in this position, this is the same as you buy stocks, do not always look at the current best increase, but also consider which sector valuation has an advantage, the future may rise in the market, the core is that you need to understand the meaning of each index, and then according to this index, to choose the proportion of allocation.
So in addition to the CSI 500, which index can be considered?
Dana has been optimistic about the Science and Technology Innovation 50 Index, the Science and Technology Innovation Board is our newly established plate, the goal is China's NASDAQ, although in the development of chips, we still have a lot of way to go, but stick to it, will it be successful?
In general, index funds, like stocks, do not just look at the immediate, or the current ranking, understand the direction of index fund allocation, is the core of ETF investment.
———— above, Financial Wang Dana, more investment thinking and logical analysis, welcome to pay attention!
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