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Index funds means in accordance with certain criteria constitute index to purchase the stock market index which includes all or part of the securities the fund, and its aim is to achieve the same with the index level of return.

For example, the Shanghai Composite Index Fund’s objective is to acquire and the Shanghai Stock Exchange composite index, like the proceeds from Shanghai Composite Index Fund in accordance with the Shanghai Composite Index, the composition and weights’s purchase index stocks, accordingly, the Shanghai Composite Index fund’s performance will be like Shanghai Composite Index, the same fluctuations .

Index funds most prominent feature is the low cost and delay tax, both to the Fund will have a great impact on earnings. Moreover, such an advantage in a longer period of time is even more pronounced. In addition, the simplification of investment portfolio fund managers will need to make frequent contact with agents, they do not have stock options or the identification of market timing.

Specifically, the index of the main characteristics of the Fund’s performance in the following areas :

One, low-cost index fund is the most prominent advantage. Expenses including management fees, transaction costs and cost of sales in three aspects. Management fees is the fund manager for the investment management costs; Transaction costs refers to the sale of the securities broker commission transaction costs. Because index funds take hold strategy, not regular stock, which cost far less than actively managed funds, the difference sometimes reaches 1% -3%, although the absolute amount from the point of view this is a very small number, but the effect of compound interest exists, in a longer period cumulative results of the Fund will have a tremendous impact on earnings.

Two disperse and ward off risks one hand, the index fund widely diversified investment, any individual stock volatility index fund will not have the overall performance impact that will spread the risks. Another aspect, as index funds pegged to the index generally have a longer history of the track, therefore, to a certain extent, the risk index fund is predictable.

3, deferred taxes as index funds have taken a buy and hold strategy, the stock held by the 2.80, is very low, only when a stock removed from the index, or the redemption request of investors, index funds will sell the stock holders realize some capital gains, annual payments of capital gains tax (in the United States and other developed countries, the capital gains tax is derived from the scope of) little, coupled with the effect of compound interest on the deferred tax would bring many benefits to investors, particularly in the light of years later, this effect will become more prominent.

4, less because of operational monitoring index funds do not have to take the initiative in the investment decision-making, so the fund managers of the Fund is basically no need to monitor the performance. Index fund manager’s main task is to monitor the corresponding index changes to ensure that the index fund portfolio constitute adapt it.

According to investors Traded Funds documents when required to pay sales costs, the Fund can be divided into fund fees and charges Fund. Cost of sales is defined as a publicity and fund pay brokerage commissions collected fees. Sales costs can be divided into two types, enjoy a special subscription fee of purchase, the Fund paid by the fees; The other is the redemption fee, that is, buy back the funds collected by the fee. Commonly known to enjoy a special subscription fee before charges, redemption fees after charges.

Fund fees mean investors in buying funds, to pay certain marketing expenses of the Fund.

Fund fees do not mean investors in buying funds, without the payment of the costs of marketing funds. However, such funds generally charge a small fee for the redemption and prevent recurrent redemption.

Generally speaking, the majority of funds are charging Fund.

Fund fees and charges fund is an open-end fund.

What is the domestic fund? What is the International Fund? What is the Fund? What is the fund?

According to fund capital sources and the use of different places and can distinguish the following types of funds :

Domestic fund is capital from domestic investors composed of investment in the domestic stock market investment fund.

International fund is the fund from domestic and foreign investors in the securities market investment funds.

National fund is capital from abroad, and invest in a particular country’s investment funds.

Overseas funds also called offshore funds, the fund is capital from abroad and foreign investment in the stock market investment funds.

To care is the same investment will go to a trust in the share of funds transferred to another consignment agencies business.

Processed custody business to carry the required documents and information with the type of application and the processing time required to bring redemption of the same.

Fund holders during transfer trusteeship, it could be in a sales organization (location) to buy shares in the fund a one-time transfer, part of the transfer, but after the completion of transfer custody and transferred into the sales organization shares in the fund balance of not less than “contracts” with the minimum requirements a share.

If investors turn trusteeship after the sales organizations (location) hosted a fund balance below the minimum share of the trust to be recognized as unsuccessful. If the investor share of the fund balance is already below the minimum share to a trustee must transfer all applications, the number of applications if not all, the number of registered with the department register the transaction should be recognized as a trustee to no avail.

QDII is the Qualified Domestic Institutional Investor (qualified domestic institutional investor)’s initials, refers to the non-convertibility of RMB under capital accounts, capital markets were opened up under control to allow domestic institutions to invest outside a system arrangement. However, to the people QDII (qualified domestic institutional investor) can be achieved Valet offshore financial business, investors will be available yuan or US dollars directly to the banks, insurance companies, fund companies, and so they took to the foreign investment capital market.

QDII most important significance lies in broadening the domestic investors investment channels, which allow investors to truly achieve their assets in a global context configured in spreading risks while the full enjoyment of the global capital market results.

Securities investment funds, the investment scope of the securities market, including all securities, including stocks, bonds, corporate bonds, financial bonds, convertible bonds, money market instruments, warrants, and asset securitization products. But each one specific to the fund, because of its investment objectives of the different differentiated.

Stock-fund stock investment, and the different types of styles stock fund of their choice from the same types of stocks, such as value funds main choice of those standards and operating profits are very stable market for investment;

Growth Fund mainly those who choose a high level of profit growth of listed companies investment; index fund invests mainly in securities of the index constituent stocks; bond-fund major investment bonds; money market funds invest only in money market instruments, etc.

Securities investment funds are concentrated funds then everybody’s major investment in stocks, bonds, money market instruments, such as financial products, the prices of financial products is subject to fluctuations, even though the Fund’s investments will normally be taken decentralized portfolio investment, but such basic price fluctuations caused by the base the overall fluctuations in the value of the assets is not completely eliminated, so the purchase of the Fund does not mean that the Fund’s income is determined, in other words there is a certain degree of risk. The two main risks include the following :

The price fluctuation risks. The investment will be subject to the price volatility of the Fund’s net worth will also therefore fluctuations occur. The price of closed-end funds with the Fund’s net worth is between related to the general fundamental changes in the same direction, if the fund net serious decline in the general price of the closed-end funds will decrease. And the open-end fund share price is the net value of the Fund, an open-end fund purchase and redemption prices will drop as the net down. The Fund will purchase fund faced the risk of price changes. If the price fell to fund the purchase cost, without taking into account factors affecting dividends circumstances, holders of the fund will share the losses.

Liquidity risk. Closed-end funds for the purchase were run, when to sell fund, may be facing a certain price to be sold under selling price risk; In addition, the open-end fund holders, if faced huge redemption, fund managers may be deferred payment of redemption money. affected holders for the funds.

Overall, however, the risk of buying funds than buying shares directly to the risk of small, mainly because of the dispersal of investment funds does not arise solely by the stock price fluctuated wildly suffered great loss. The volatility of the Fund and the entire market is close to that for ordinary investors to better evade the stock risk and achieved average market return