Core Viewpoint - The article discusses the increasing curiosity around quantitative index enhancement strategies, emphasizing that the enhancement primarily comes from stock selection and trading strategies [3]. Group 1: Stock Selection Enhancement - Index enhancement strategies aim to achieve returns that exceed benchmark indices by combining passive tracking of constituent stocks with active management [4]. - Stock selection enhancement can be achieved through two main methods: 1. Utilizing multi-factor stock selection models to adjust the weight of individual stocks within a portfolio, allowing for deviations from the benchmark index [5]. 2. Expanding the stock selection universe to include non-constituent stocks that are expected to perform better than the index constituents, which is a significant source of enhancement [8]. - Most index enhancement funds invest approximately 80% of their assets in index constituent stocks, with the remaining 20% allocated for enhancement operations [9]. Group 2: Trading Enhancement - Trading enhancement is more commonly applied in private equity than in public funds, with notable strategies including T0 trading and timing strategies [10]. - T0 strategies allow for capturing intraday profit opportunities, with a focus on bottom warehouse T0 strategies that involve day trading based on short-term price movements while maintaining the same number of shares [12]. - Timing strategies adjust portfolio positions based on market conditions, allowing for increased exposure during bull markets and reduced exposure during bear markets, enhancing overall returns [13].