What is the 50AH preference index? We all know that there are many kinds of stock fund market, and we don't know how to choose a variety of index types. However, different indexes have their unique advantages. Today we will look at what the 50AH preferred index is and what its advantages are.
We all know that the same company can be listed in both A shares and Hong Kong shares, called H shares. For example, Ping An of China, whose company is listed in the mainland and also listed in Hong Kong, has the same company equity behind each A share or each H share. For example, Ping An Company has 1 billion shares, and you hold one A share and one H share of Ping An Company, which is one part of 1 billion shares. From the perspective of shareholders, there is no big difference between holding A shares or H shares.
Although the rights and interests behind A shares and H shares of the same company are the same, they are listed on different stock markets after all, which leads to different prices of A shares and H shares. A-share is mainly participated by mainland investors, while H-share is mainly participated by European and American investors. Different investors have very different ways of thinking and investment preferences. As a result, the trends of A shares and H shares are not the same, and sometimes there are very big differences. Since the companies behind A shares and H shares are the same, and their corresponding equity is the same, then when there is a large price difference between A shares and H shares, the space for excess returns will be generated. For example, if we observe that H shares are cheaper, we can exchange A shares into H shares, so that we can get more shares.
50AH Preferred Index Fund is an index fund that takes advantage of AH share price difference Its constituent shares are the same as those of the Shanghai Stock Exchange 50. It is also the largest 50 plus enterprises selected from the Shanghai Stock Exchange. Such companies have both A shares and H shares, such as China Ping An. The 50AH preferred index is to select the cheaper one from A-share and H-share and sell the more expensive one to earn a price difference and a certain excess return.
Such a price difference will occur every few years. Before 2010, A shares were more expensive than H shares for a long time. From 2012 to 2004, H shares were more expensive. From 2015 to 2016, A shares became more expensive than H shares. By selling expensive shares back and forth and buying cheap shares at the same time, we can get more price differences.
Compared with the Shanghai Stock Exchange 50, the 50AH preferred index has higher returns, which is an advantage of the preferred index.
Index fund tracking 50AH preferred index: Huaxia Shanghai Stock Exchange 50AH preferred on/off the market
