The value index fund is a strategic weighted index fund. Its stock selection rules are based on stocks with low P/E ratio, low P/B ratio, low P/V ratio and high dividend yield. Generally speaking, a stock is suitable for investment when its P/E ratio is low, P/B ratio is low, and P/P ratio is low. The higher the dividend yield is, the more suitable it is for investment.
At present, there are not many value indexes in China, mainly 300 value indexes. The 300 value index is composed of 100 stocks with low P/E ratio, low P/B ratio, low P/P ratio and high dividend yield selected from the constituent stocks of the CSI 300 index. Its overlap with the CSI 300 is relatively large, because the constituent stocks are included in the CSI 300, but from the perspective of long-term investment effect, the investment value of 300 is better than that of the ordinary CSI 300 index.
Here is an investment tip: most of the returns of the strategy weighted index are better than the corresponding market capitalization weighted index. For example, the fundamental 50 index, the CSI dividend index, and the 300 value index all have better long-term returns than the CSI 300 index.
Since the value return of 300 is stronger than that of CSI 300, why would anyone buy CSI 300 Index Fund? In fact, there is a concept involved here - liquidity. Although the long-term return of the 300 value is better, it invests in some companies in the Shanghai and Shenzhen 300, and adopts the strategy of low P/E ratio, low P/B ratio, low P/P ratio, and high dividend yield. The number of stocks is limited, and the amount of funds it can accommodate is also limited. The Shanghai and Shenzhen 300 and other market capitalization weighted indexes can accommodate a very large amount of capital without any strategy and have good liquidity. For example, the Shanghai Shenzhen 300 can accommodate trillions of funds, while the 300 value can only accommodate hundreds of billions of funds. So 300 Value is a small and beautiful strategic fund. But for our ordinary investors, there is not much investment capital. Strategy weighted index funds such as fundamentals, value, dividends, etc. are more suitable for our ordinary investors.
Index fund tracking 300 value index: OTC Shen Wanling Xin CSI 300 value
