GUANGZHOU (Fund China) – In the 2007 bullish market, the index fund performed thoroughly excellently.

The WIND information showed that the average net value growth rate of the 15 open-end index funds including the enhanced index funds) was up to 145.29%, while the average net value growth ratio of the 120 open-end euiqty funds was lower,only 129.12% at the same period. Obviously, the index fund won the 2007 bullish market condition pacemaker with a absolute superiority.

Taking Wanjia Shanghai 180 Index Fund, the first index fund with passive investment strategy in domestic as an example. Although the last year’s market in full of frequent and sharp influctuations, this index fund still gain a net value growth rate of 145.34%, better than most of the equity funds. This is not an accident. The data shows that from its establishment in 2008, the net value Compound Growth Rate rose sharply to 388.56% in less than 5 years, higher beyond the Shanghai Index 258% at the sam period and the average annual yield ratio is over 77% since its establishment.

The oversea mature market research data also indicated that in a long-term uptrend, the passive index fund often gains a better and higher investment yield than the active fund.

For this, OuQingling, the manager of the Wanjia Shanghai 180 Index Fund said, the outstanding performance of the index fund depands on two factors, first, the performance of the tracked object index composite shares such as the SSE 180 index(SSE CONSTITUENT INDEX) tracked by the Wanjia Shanghai 180 Index Fund, are composed by 180 most representative corporations of different fields listed in the shanghai bourse. The SSE 180 index covers a wide and representative industry ranges. The statistics showed that, there are 10 shares among the 180 composite shares which accumulative growth is over 500%. In the 10 shares, the CHINA SPORTS INDUSTRY, Haitong Security, Chengdu Urban Construction，SHANDONG GOLD MINING，ZHONGJIN GOLD，and China Orient Aviation are all rose more than 600%, and there are more than 147 shares which rose more than 100%. Second, the fund manager’s management ability.

OU Qingling said that at present,  the macro economic environment’s long-term uptrend is not changed as China is still in the RMN appreciation mood. Meanwhile along with the share reform ending, the domestic capital market quickly expand, and more and more quality blue chips listed in the shanghai bourse. The SSE 180 index composed by the 180 most representative listed corporations in varioius sectors will be in a long-term uptrend. And the index fund tracking the SSE 180 index will undoubtful gain a long-term benefit.

Market analysts said that the excellent performance of the index funds would continue in 2008. adopting a buy in and holding strategy in the bullish market will often bring a high yield, and yield will even be higher-than-expected in the unilateral uptrend market. Actually, it is hard to buy in at the lowest point and redeem at the highest point. But adopting the same strategy in the index fund investment, investors can also gain a perfect yield in the bullish market and the exchang handling charge is lower.

Copyright Fund China 2009.

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