et fund refers to a transactional open-end index fund, which is also commonly called Exchange Traded Fund (ETF). It is an open-end fund with variable fund shares listed on the exchange.

Transactional open index fund is a special type of open-end fund, which combines the operating characteristics of closed-end fund and open-end fund. Investors can purchase or redeem fund shares from fund management companies, and at the same time, they can buy and sell ETF shares in the secondary market at the market price like closed-end funds. However, the purchase and redemption must exchange a basket of stocks for fund shares or a basket of stocks for fund shares. Because there are both secondary market transactions and subscription and redemption mechanisms, investors can carry out arbitrage transactions when there is a difference between the ETF market price and the net value of the fund unit. The existence of arbitrage mechanism makes ETF avoid the common discount problem of closed-end funds.

according to different investment methods, ETFs can be divided into index funds and actively managed funds, and most ETFs abroad are index funds. At present, ETFs launched in China are also index funds. ETF index fund represents the ownership of a basket of stocks, which refers to the index fund that is traded on the stock exchange like stocks, and its trading price and net fund share trend are basically consistent with the tracked index. Therefore, investors buy and sell an ETF, which is equivalent to buying and selling the index it tracks, and can obtain basically the same income as the index. Usually, a completely passive management method is adopted, aiming at fitting an index, which has the characteristics of both stocks and index funds.