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Market scale growth: The inclusion of index funds is expected to attract more individual pensions to participate, thus increasing market scale and improving market liquidity.Underdevelopment of the third pillar: Compared with developed countries, the scale of the second and third pillar pensions in China is relatively low, which needs to be promoted through policy guidance.2.5 Investor Education and Financial Literacy Improvement

Incorporating index funds into the personal pension investment catalogue will also help to strengthen the education and popularization of financial market knowledge and enhance the financial literacy and risk awareness of the whole society. According to market research, individual pension investors pay more attention to the long-term performance and risk control of products when choosing investment products, which will prompt investors to pay more attention to the long-term trend and investment knowledge of financial markets, thus improving the financial literacy of the whole society.Guide long-term funds to enter the market: Personal pension is a long-term fund, and its investment in index funds will help guide more long-term funds to enter the capital market and enhance market stability.After being included in the index fund, the funds in the individual pension account will enter the market as incremental funds, which will significantly improve the market liquidity. According to official data, as of December 12th, the number of Public Offering of Fund products that can be invested in personal pension has increased to 284, and it is estimated that the scale of new funds will reach several hundred billion yuan. This scale of capital inflow will provide stable liquidity support for the market and reduce the sensitivity of the market to short-term capital fluctuations.

2.2 diversification of investment styleImprove market efficiency: the transparency and low rate of index funds help to improve market efficiency, reduce transaction costs and increase investor participation.