A simple explanation of ETF and LOF funds: different places for subscription and redemption, different targets for subscription and redemption, different trading restrictions, and different investment strategies.

The places for subscription and redemption are different: ETFs and LOFs both combine the characteristics of closed-end funds and open-end funds, and can be purchased in the primary market and redeemed in the secondary market.

However, the places for subscription and redemption are different: ETF subscription and redemption can only be carried out on the exchange, that is, only on-site transactions can be carried out, while LOF can be carried out at both the exchange and the agency sales outlet.

The objects of subscription and redemption are different: ETF adopts "physical subscription and physical redemption". What investors subscribe for is a basket of stocks, and what they redeem is also a basket of stocks.

The LOF fund may subscribe for a basket of stocks, but the redemption is in cash.