ETF generally refers to trading open index funds, also known as exchange traded funds. It is an open-end fund with variable fund shares and is listed on the exchange.

LOF is called "listed open-end fund" in China. In other words, after the issuance of listed open-end funds, investors can purchase and redeem fund shares at designated outlets, or buy and sell funds on exchanges.

However, if investors want to sell the fund shares purchased at designated outlets, they must go through certain transfer custody procedures; Similarly, if you want to redeem the fund shares you bought online on the exchange and redeem them at designated outlets, you must also go through certain transfer custody procedures.

2. Different types of funds are applicable.

ETF is mainly a passive investment fund product based on an index. LOF can be used not only for passive investment fund products, but also for economic investment funds, although open-end funds are also listed on the exchange.

3. The participation threshold is different.

In the design scheme of ETF, the basic unit of subscription and redemption is 6,543,800 fund units, which has a high starting point and is suitable for institutional customers and powerful individual investors. The subscription and redemption of LOF products, like other open-end funds, starts from 1000 fund units, which is more suitable for small and medium investors to participate.

4. Arbitrage operation mode and cost are different.

ETF must buy and sell a basket of stocks in the process of arbitrage trading, which involves both funds and the stock market, while LOF arbitrage trading only involves the trading of funds. The more prominent difference is that according to the design of ETF in Shanghai Stock Exchange, it provides investors with real-time arbitrage opportunities, which can be realized.

References:

Baidu encyclopedia -ETF

Baidu encyclopedia -LOF