Selecting an index is not just about finding one with strong market performance; it requires consideration from two perspectives: methodology and style characteristics. Generally, an index can be evaluated based on representativeness, transparency, investability, and stability.

Representativeness
Comprehensively reflects the performance of the market, industry, size, and other characteristics.

Transparency
Construction standards are based on systematic and transparent principles, reducing biases caused by human factors and supporting testing.

Investability
The quality, quantity, liquidity, industry distribution, market capitalization size, and risk-return characteristics of the constituents should meet the necessary conditions for investment.

Stability
Avoid frequent adjustments, as excessively high turnover rates can lead to substantial transaction costs.