Having trouble choosing ETFs? E Fund clarifies four major classifications.

The current ETF market has entered the "era of a thousand funds". However, overall, the classification of ETFs remains rather vague. Investors may find it difficult to distinguish the characteristic differences among different types of products and fall into a "choice dilemma".

After taking the lead in making large - scale adjustments to the short names of ETFs earlier, recently, E Fund, combining local practices with international standards, systematically sorted out stock index ETFs into four major categories: scale indices (broad - based), style factor indices, industry indices, and theme indices. This makes it convenient for investors to understand the actual characteristics of different ETFs and find products that match their own needs. At the same time, the sorting is relatively consistent with international practices, which facilitates overseas investors to better understand and invest in Chinese ETFs.

First, for the category of scale indices (broad - based), there are differences in the definitions of broad - based indices at home and abroad, which may prevent investors from screening and comparing according to a unified standard globally and make it difficult to distinguish the true characteristics of the indices. E Fund re - sorted the generally - referred broad - based indices and more objectively presented the actual characteristics of scale indices (broad - based) from the two dimensions of market and market capitalization. For example, the CSI A500 is a large - cap index of A - shares, and the STAR 50 is a large - cap index of the STAR Market. Thus, investors can clearly understand the characteristic differences of products and better match their investment needs.

Second, for products in the style factor category, which have developed rapidly in recent years, some investors may still be relatively unfamiliar. Style generally refers to growth and value; factors include momentum, market capitalization, quality, dividend, and low volatility. Academic research suggests that these factors can improve returns or control risks in the long run. This time, E Fund sorted style factors into four major categories: growth, value, dividend, and others, based on market recognition and product development. This makes it easy for investors to quickly understand the product characteristics and match products according to their own needs. Among them, growth and value are further divided by the large, medium, and small - cap dimensions. For example, the CSI 300 Growth is large - cap growth, and the CSI 1000 Value is small - cap value. Their risk - return characteristics are completely different, suitable for different types of investors.

For industry and theme ETFs, there are currently many industry classification systems at home and abroad, such as GICS, CSI, and Shenwan. Investors who want to quickly understand the industry classifications may not know which system to refer to. Moreover, the boundary between industry and theme indices is not particularly clear, and it is also difficult for investors to conduct searches and comparisons. E Fund clarified what an industry index is and what a theme index is: the former is based on industry classification and reflects the performance of stocks in a specific industry, while the latter revolves around a long - term trend, theme, or concept and usually spans multiple industries. At the same time, on the basis of integrating commonly used industry classification systems at home and abroad, eight major industry classifications were formed, and six major theme categories were formed based on China's industrial advantages and industry development trends, covering all industry and theme index products in the market. Investors can more clearly and conveniently search, compare, and invest in various industry or theme ETFs.

E Fund stated that it will always adhere to a customer - centric approach and optimize the index allocation experience. Whether it is the current sorting of ETF classifications or the previous large - scale adjustment of ETF short names and the promotion of short - name standardization in the industry, all efforts are made to make ETF investment simpler and more convenient. In the future, E Fund will continue to adhere to low fees, refined management, and platform - type development, and is committed to providing investors with higher - quality ETF products and services.

Classification of E Fund's equity ETF products