ETF fund, also known as transactional open index fund, is a kind of fund traded in the secondary market, also known as exchange-traded fund. Although it is very similar to ordinary open-end funds, there are still great differences between them.

What's the difference between ETF funds and ordinary open-end funds?

1 has different trading methods: ETF funds can be traded in the secondary market, just like stock trading; Ordinary open-end funds cannot be traded in the secondary market, but through subscription and redemption.

2 different handling fees: ETF only pays 0.2% commission to brokers at the time of trading; Traditional open-end funds need to pay about 1.0%~ 1.5% management fee, 1% subscription fee and 1.5% redemption fee every year.

3 different management methods: ETF management is passive management, ETF managers will not take the initiative to choose stocks, and the constituent stocks of the index are ETF stock selection. The focus of ETF operation is not to outperform the index, but to track the index; Ordinary open-end funds are often active management models.

4 different trading rules: after ETF is listed, the trading method is just like stocks, and the price will change at any time in the intraday trading, so investors can place orders in the intraday trading; The traditional open-end fund takes the net value of fund shares after the daily closing as the trading price of the day.

5 whether the share is fixed is different: ETF funds traded in the market can reach100% because of their fixed share; Ordinary funds are open-end funds, and the total share is not fixed.

6 different sellable time: ETF funds can not be sold on the day of subscription, but can be sold on the next trading day; Ordinary OTC funds need to wait T+2 days to trade.

Compared with ordinary open-end funds, ETF funds still have many advantages, such as lower fees, more flexible transactions and more obvious advantages of the fund itself, but relatively speaking, there are not so many types of ETF funds.