(Huaxia Fund SSE 50ETF, Fang Jun, fund manager of small and medium-sized board ETF) In recent years, ETF has set off a wave of passive management in European and American fund markets, which tends to surpass active management of funds. Generally speaking, passive management has the advantages of low turnover rate, low cost and scattered risks, while active management focuses on fund managers' ability of stock selection and timing, and their performance is relatively unstable. Empirical research shows that most passive funds have the upper hand in long-term performance. ETF is a very suitable tool for retail investors because of its convenient trading, low cost and low threshold. Ordinary retail investors can invest in ETFs in the following ways: improve the investment portfolio. Every investor has his own familiar fields, some are familiar with bonds, some are familiar with stocks, some are familiar with technology stocks, and some are familiar with large-cap stocks. However, portfolio allocation is a comprehensive knowledge. For those who are familiar with bonds, it may be difficult to establish a stock portfolio in a short time, just like looking for a needle in a haystack, and ETF can help such investors easily solve this problem and establish a perfect portfolio. After in-depth research on a single company, venture capitalists in the hedge market may think that the company's industrial prospects are very good, and through the analysis of financial statements and other related materials, they think that the company's financial structure is sound and its operating performance is good, and they hope to hold this stock for a long time. However, due to the poor market atmosphere in the short term, it may be necessary to bear uncertain market risks when investing. At this time, you can choose to buy the stock and short the ETF (which needs the support of securities lending) to hedge the short-term market risks, so as to obtain the performance of the stock. What investors are facing is not traditional stocks, but how to choose stocks in the market. ETF is a combination of stocks of listed companies. Although individual stocks may not be as active as individual stocks, they can provide better dispersion effect than a single stock. In terms of trading, ETFs, like individual stocks, are all products listed on the exchange, so the trading methods in the secondary market are exactly the same. Investors can participate in trading as long as they open accounts in qualified brokers. ETF does not adopt passive management like traditional mutual funds, so the annual management fee is lower and the transaction cost is lower. Because the index tracked by the fund manager has been written in the prospectus, the portfolio is transparent and the operation strategy is consistent, and the influence of the fund manager on the performance lies only in the tracking error. As for stock funds, active management is mostly adopted, and the performance is quite different. In terms of transaction, investors only need to pay general brokerage fees when buying ETFs, and the price is open. Unlike the handling fee charged by * * * funds, ETFs can buy and sell at the current market price at any trading time in the secondary market. Compared with * * * funds, ETFs can only purchase and redeem at the closing net value of the day. ETF is not only transparent in price, but also shortens the time required for investors to make decisions and execute transactions. In the past 15, the average annual yield of international stock market was 8.83%, which was much higher than that of time deposits. Market Timing Investment For investors who use market timing strategy, in the past, large-cap heavyweights can only be used as an index replacement tool, but the trend of large-cap heavyweights and indexes may not be exactly the same.