Trading open-end index fund is a special type of open-end fund. It combines the operating characteristics of closed-end funds and open-end funds. Investors can not only buy or redeem fund shares from fund management companies, but also buy and sell ETF shares at market prices in secondary markets such as closed-end funds.
When there is a price difference between ETF market price and fund unit net value, investors can arbitrage. The existence of arbitrage mechanism makes ETF avoid the common discount problem of closed-end funds.
Extended data
ETF can be divided into index fund and active management fund. Foreign ETFs are mostly index funds. ETF index funds represent the ownership of a series of stocks. It refers to index funds that trade like stocks in a stock exchange. Its transaction price and fund share net value basically meet the following indicators.
The advantages of ETF fund are diversification of investment and reduction of investment risk, low transaction cost, investors can arbitrage on the same day, high transparency and increasing market hedging tools.
Baidu Encyclopedia-Trading Open Index Fund