Enhanced index fund is also a common index fund. What does this enhancement mean? We all know that index funds track the index. Ordinary index funds track the index 100%, that is to say, what are the constituent stocks of the index? Index funds invest in strict accordance with the constituent stocks and proportion. however Enhanced index funds are different. Only 80% of them track the index, and the other 20% are enhanced operations. That is, they do not select stocks according to the rules of the index, but actively select stocks.
Why add enhanced operations?
1. It must be that in order to obtain better returns, we should apply some good methods on the basis of the original rules to obtain excess returns;
2. When designing an index, the conditions are often relaxed, so there will be some stocks selected occasionally. If you can add some subjective operations to the index, and reduce the positions of obviously unqualified varieties, it will theoretically be more consistent with the purpose of the index.
So what is the effect after adding enhancement, and has the benefit been improved? At present, there are forty or fifty enhanced index funds in China, of which about 70% have obtained super
