In addition to dividing index funds into broad based index funds and industry index funds, we can also divide index funds into market capitalization weighted funds and strategy weighted funds. How on earth is this divided? What is a market capitalization weighted index fund? Let's study together.
Two items are necessary for index rules:
1. Stock selection rules: how to select the stocks that should be included in the index;
2. Weighting rule: what should be the investment proportion of each stock.
Different stock selection rules and different weighting rules result in different types of indexes, such as Market capitalization weighted index is weighted according to the size of market capitalization.
There are many friends who ask, what is the market value? Market value is simply how much a company is currently worth. The calculation formula of the company's market value is:公司市值=股价×股份数。
按照市值加权的指数有很多，比如常见的沪深300指数。沪深300指数在挑选股票的时候挑选的是上海和深证交易所中市值最高的300只股票，同时沪深300指数基金也是按照市值大小来投资的，市值越高占比越高。单个公司的比例=单个公司的市值/总市值。
Market capitalization weighted index is the most important type of index in our stock market. Many indexes are market capitalization weighted, such as the Shanghai Stock Exchange 50 Index, the Shanghai Shenzhen 300 Index, the China Securities Exchange 500 Index, and the GEM Index in A-shares. Hong Kong stocks: Hang Seng Index, H-share index, etc. An index fund that tracks a market capitalization weighted index is a market capitalization weighted index fund.
