Advantages of ETF funds
1, low cost
Because ETF completely replicates the trend of the index, it does not need to spend a lot of manpower and financial resources to analyze the market change configuration, which reduces the cost to some extent. In addition, reduce dependence on fund managers. The target tracked by index funds is generally composed of a number of companies and stocks, with good stability.
In terms of rates, ETF's management fees and custody fees are lower than other funds. For example, Huaxia SSE 50ETF Fund has a management fee of 0.5% and a custody fee of 0. 1%. The rate of open index fund is 1.5%, and the custody fee is 0.25%.
2. High liquidity
Ordinary open-end funds publish their net values once a day, and ETFs refresh their quotations every 15 seconds. It can be traded as quickly as a stock, which is more efficient than applying for and redeeming funds in a bank.
3. Information transparency
Because the net value fluctuates according to the index target, it is more transparent than other funds.
Shortcomings of ETF funds
1. Due to high liquidity and rapid changes in net value, investors are easy to buy and sell frequently, which makes it impossible for investors to hold for a long time, thus affecting fund transactions and increasing transaction costs;
2. Liquidity. Some ETF funds are too small or too small, which will lead to poor liquidity and cannot meet investors' demand for funds.
What are the advantages and disadvantages of ETF funds? Everyone is like this. Warm reminder, financial management is risky and investment needs to be cautious.