With the increasing popularity of investment and financial management, more and more investors begin to pay attention to fund products. In the fund market, LOF funds and ETF funds are very popular investment products, but for many novices, it is easy to confuse their differences. This paper will analyze the differences between the two fund products from multiple angles, hoping to help investors better understand them.

I. Definition

1.LOF fund

LOF fund, that is, listed open-end fund, refers to the fund manager who raises funds from the public through listing transactions and invests in financial instruments that meet the requirements of the fund prospectus.

LOF fund is an open-end fund. Anyone can purchase or redeem it as long as it meets the requirements. The fixed conversion ratio of its share price at the time of purchase and redemption is 1: 1.

2.ETF funds

ETF fund, namely exchange traded fund, refers to the securities fund investment tool based on the stock market. Its main feature is that its behavior is similar to that of ordinary stocks in the market, but it is essentially a trading tool for investing in a variety of financial products.

ETF fund shares can be listed and traded on the stock exchange, and their prices can rise or fall according to the market supply and demand.

Second, trading.

1.LOF fund

LOF fund is an open-end fund, so its trading mode is similar to that of traditional funds. Investors can purchase or redeem through fund companies or fund trading platforms.

However, in some cases, because LOF funds are also market-oriented, the trading time may be longer or shorter than that of traditional funds. According to the time of the stock exchange, it is usually 9: 30-1:30, 13:00- 15:00. Therefore, investors need to choose trading time according to market conditions and their own needs.

2.ETF funds

ETF funds are traded in a similar way to stocks and can be purchased or redeemed through stock exchanges. Its trading time is similar to that of stocks, from 9: 30 am to 3: 00 pm.

But unlike stocks, ETF funds do not need to trade with counterparties in the secondary market, but directly with fund managers.

Three. Investment income and expenditure

1.LOF fund

LOF funds usually have lower returns than ETF funds because their investment strategies are conservative. However, its cost is generally lower than that of ETF funds, because there is no transaction cost in the secondary market of ETF funds.

In addition to the basic management fees and custody fees, LOF funds also have some other fees, such as sales service fees and securities trading fees.

2.ETF funds

ETF funds generally have a higher rate of return than LOF funds, because their investment strategies are more radical, and they pay more attention to flexibility and rate of return growth. However, the cost of ETF funds is higher than that of LOF funds, and the secondary market transactions and stamp duty are relatively large.

Four. Investment objectives and share conversion

1.LOF fund

LOF funds have relatively fixed investment targets, and usually only invest in high-quality stocks such as blue chips and opportunity stocks in the A-share market. The share exchange ratio is generally fixed 1: 1.

2.ETF funds

ETF funds have diversified investment targets, including stocks, bonds, commodities and other financial products. However, there may be some risks of premium or discount in the transaction process. Its share conversion mechanism is complex, and the conversion between different shares can be realized by applying for conversion.

Generally speaking, LOF funds and ETF funds have their own advantages and disadvantages. Investors can choose their own fund products for investment according to different needs and investment styles.