Exchange Traded Fund (ETF), also known as Exchange Traded Fund, is an open-end fund that is traded on an exchange and has variable fund shares.

Exchange-traded open-end index funds are a special type of open-end funds. They combine the operating characteristics of closed-end funds and open-end funds. Investors can purchase or redeem fund shares from the fund management company.

At the same time, ETF shares can be bought and sold in the secondary market at market prices like closed-end funds. However, subscriptions and redemptions must be made in exchange for a basket of stocks for fund shares or for fund shares to be exchanged for a basket of stocks.

Extended information: According to different investment methods, ETFs can be divided into index funds and actively managed funds. The vast majority of foreign ETFs are index funds.

The ETFs currently launched in China are also index funds.

ETF index funds represent the ownership of a basket of stocks and refer to index funds that are traded on the stock exchange like stocks. Their trading prices and trends in the net value of fund shares are basically consistent with the index being tracked.

Therefore, when investors buy and sell an ETF, they are equivalent to buying and selling the index it tracks, and they can obtain returns that are basically consistent with the index.

Usually a completely passive management method is adopted, with the goal of fitting a certain index, and has the characteristics of both stocks and index funds.