There are a few indices that you can pay attention to, and I will introduce them one by one today.
1. Types of indices.
The CSI A50 Index is a newly established index, something new that has only been available since New Year's Day this year.
The CSI A50 Index selects the 50 largest market capitalization** from the leading listed companies in various industries as the index sample to reflect the overall performance of the most representative leading listed companies** in each industry.
Market Cap: 1320 trillion.
Current corresponding index**: None.
SSE 50 Index.
The same 50 index, the SSE 50 and the CSI A50 are very different. The SSE 50 is the top 50 stocks in Shanghai by market capitalization**. The CSI 50 is a Shanghai and Shenzhen stock market, and it is not completely selected according to market capitalization, but is a typical representative of all walks of life.
Total market capitalization: 1857 trillion.
Correspondence**: SSE 50 ETF.
CSI 300 Index.
The CSI 300 is the top 300 selected from the Shanghai and Shenzhen stock exchanges based on market capitalization and weighted by circulation.
To put it simply, it is a collection of the top 300 stocks with the largest market capitalization and the best liquidity in Shanghai and Shenzhen, which is composed of leaders from all walks of life and is the representative of ** stocks.
Total market capitalization: 4599 trillion.
Correspondence**: CSI 300 ETF.
CSI 500 Index.
Select 500 stocks from the Shanghai and Shenzhen stock exchanges with an average daily market capitalization of 301 to 800 in the past year**.
Total market capitalization: 1149 trillion.
Correspondence**: CSI 500 ETF.
CSI 1000 Index.
Select 1,000 stocks from the Shanghai and Shenzhen stock exchanges with an average daily market capitalization of 801 to 1800 in the past year**.
Total market capitalization: 1087 trillion.
Correspondence**: CSI 1000 ETF.
The CSI 2000 Index selects 3,800 stocks from the Shanghai and Shenzhen stock exchanges that ranked between 1,801 and 1,801 in terms of average daily market capitalization over the past year**.
Total Market Cap: 914 trillion.
Correspondence**: CSI 2000 ETF.
Hang Seng Index. The weighted average stock price index with 50 representative listings** in the Hong Kong ** market as the constituent stock sample, and the weighted average stock price index weighted by its issuance volume is the most influential stock price index reflecting the price range trend of Hong Kong**.
Corresponding**: Hang Seng Index **LOF, Hang Seng Index ETF.
Hong Kong Stock Connect 50 Index and Hong Kong Stock Connect 100 Index.
The former is an index compiled by the 50 largest companies listed in Hong Kong by market capitalisation. The latter is an index of the 100 largest Chinese listed companies by market capitalization listed in Hong Kong.
Correspondence**: Hong Kong Stock Connect 50 ETF and Hong Kong Stock Connect 100 ETF.
2. How to choose index investment.
I am used to choosing the CSI 300 as the thermometer for A-shares, because the CSI 300 represents the most powerful group of companies listed on the A-share market, and it also has the largest market capitalization.
A lot of them are blue chips. What I know is that there are a lot of people who don't invest in the CSI 300 Index and instead invest in the CSI 300 Index, in a bear market, and then sell in a bull market.
Judging from the past trend, this investment method has been very successful! Then there are some advantages to investing in the CSI 300 index, the first is that the risk is low, the risk here is relative to the investment, because the performance of the index is difficult, and the CSI 300 has the characteristics of diversification and stability, so it can reduce the risk well. However, investing in CSI 300 also has disadvantages, that is, the yield is often not as high as investment.
Investment** may have several times and dozens of times of returns, while investing in the CSI 300 Index** is difficult to have such returns.
It can be seen that the CSI 300, CSI 500, CSI 1000, CSI 2000, these indices almost just make up all the constituent stocks of A-shares.
Each index complements each other. As I mentioned earlier, investing in the CSI 300 is stable, because the composition of the CSI 300 is a very large enterprise. However, the growth of large-scale enterprises is often insufficient. The CSI 500, CSI 1000 and CSI 2000 just have good growth.
So we can also see that the CSI 300 has the lowest price-to-earnings ratio and price-to-book ratio, followed by the CSI 500 and finally the CSI 2000.
I took a look, and the current dividend payout ratio of the CSI 300 is about 30%, and the price-to-earnings ratio is 1069, corresponding to the overall profit growth rate should be maintained at about 7% is more reasonable. However, last year (2023), the overall profit growth rate of CSI 300 dropped significantly, less than 5%.
That's why I said that this wave of ** may not be caused by underestimation. Of course, the CSI 300 has a profit growth rate of 10 in 2224,21 profit growth rate of 15%. With the profit growth rate at that time, it corresponds to 10With a P/E ratio of 69, that's really underestimated.
If the overall profit growth rate of CSI 300 recovers to about 10% in 2024, then it is absolutely cost-effective now. The problem is ......
Will corporate profit growth recover across the market?
And when will it be restored?
I mentioned the Hong Kong Stock Connect 100 before, which is also a listed company in China, but it is a representative company listed in Hong Kong.
Then I found that the overall price-to-earnings ratio and price-to-book ratio of the Hong Kong Stock Connect 100 are smaller than those of the CSI 300.
So, is the Hong Kong Stock Connect 100 Index more cost-effective?