The Shanghai Stock Exchange Fund Index, or SSEFI, is a weighted index comprised of all Shanghai-listed open-end funds that have been launched since 1995. It is designed to track the overall performance of the Chinese fund industry and is used by investors, brokers and other professionals to gauge the performance of the overall Chinese fund market.
The SSEFI has been around since 1997 and was created by the Shanghai Stock Exchange as a benchmark for Chinese fund performance. The SSEFI is a composite index made up of the total net asset value of all funds listed on the Shanghai Stock Exchange, including US-dollar denominated funds. The index is calculated based on the market value of each funds net assets and is updated daily.
The performance of the SSEFI is mainly determined by the performance of the underlying funds in which it is comprised of. As such, the performance of the SSEFI is largely influenced by several factors. These factors include the overall performance of the Chinese stock markets, economic conditions in China, and the performance of the different types of funds in the index. In addition, the fund managers play a crucial role in driving the performance of the index as they will adjust their holdings based on their particular strategies and objectives.
Since 1997, the SSEFIs returns have been impressive. Over an 18-year period, the SSEFI has generated an average annual return of 20.9%. While this performance is slightly below the Chinese stock markets average of 22.2%, it is still much higher than the US stock markets average of 10.9%. The SSEFIs performance has been particularly impressive since 2003, with the return for that period averaging 26.8% per annum.
The SSEFI is an important barometer for the Chinese fund industry and provides a valuable means for investors to gauge the performance of the overall Chinese fund market. In addition, its long track record and strong performance have made it a popular choice for investors from around the world who are looking to invest in the Chinese market.
Although the SSEFI is considered to be a reliable gauge of the Chinese fund market, it is not completely risk free. The SSEFI relies heavily on the performance of the individual funds in which it is comprised of and if any of these funds suffer a large downturn in their performance, this could significantly affect the overall performance of the index. In addition, the SSEFI does not always reflect the volatility of the Chinese stock market as the indexs components are only adjusted quarterly. Therefore, the SSEFI might not provide the same level of protection from market volatility as an actively managed fund.
Overall, the SSEFI provides investors with a reliable means to keep track of the performance of the Chinese fund market. However, its performance is largely dependent on the performance of the underlying funds in which it is comprised of and therefore investors should do their own due diligence before investing in any of the components of the SSEFI.