ETF fund, the full name is ExchangeTradedFund.

It has three characteristics, all of which are reflected in the name.

Transaction type: it can be directly traded on the exchange, similar to stocks or closed-end funds;

Open-ended: it can be purchased and redeemed in the primary market, similar to ordinary open-ended funds;

Index Fund: The Fund adopts an indexed investment strategy to track specific indexes.

It is worth noting that ETF funds are essentially a basket of stocks. This is a "physical redemption" mechanism.

That is to say, although investors may not feel it, the subscription process of ETF funds is actually that investors exchange funds for stocks first, and then exchange stocks for ETF fund shares; The redemption process is just the opposite.

Advantages of ETF funds

Compared with the familiar common open-end funds, ETF funds have the following advantages.

First, the handling fee is low.

There is no redemption fee and stamp duty for trading ETF funds on the exchange, only commission is required.

Most of the brokerage commissions are in the tens of thousands, which is far lower than the redemption rate of ordinary open-end funds.

In addition, because it is a tracking index, the ratio of management fees and custody fees of ETF funds is much lower than that of ordinary open-end funds.

Second, the liquidity is better.

Ordinary open-end funds publish their net value every day, and it usually takes one or even several working days for the subscription and redemption shares to arrive and the funds to arrive.

ETF funds can be traded on the floor, and the price is almost real-time (15 seconds), just like stocks.

For investors, intraday price fluctuation means more investment opportunities and higher capital utilization rate.

Third, greater transparency.

The head coach believes that this is the biggest advantage of ETF funds, and there is no one.

The daily ups and downs of ETF funds, the composition of constituent stocks and the proportion of positions are very transparent.

This is very helpful for experienced investors to accurately grasp the investment direction and investment opportunities.

Ordinary open-end funds, investors can only rely more on investment managers. Specifically, what stocks it buys, what stocks it sells, and how much it buys and sells every day, investors cannot know in real time.

Selection and investment of ETF funds

I. Operation of ETF Fund

As mentioned above, the advantages of ETF funds include low cost of holding positions and convenient trading.

Therefore, investing in ETF funds is equivalent to grabbing the first hand in cost and having more choices in investment methods.

Investors can hold it for a long time or seize a short-term band.

Second, the choice of ETF funds

At present, the number of ETF funds in China has exceeded 100, including:

There are common broad-based indexes, such as 50ETF, 300ETF and GEM ETF.

There are also industry indexes, theme indexes and style indexes, such as pharmaceutical ETFs, central enterprise ETFs and value ETFs.

More other indexes such as bonds, commodities and even the whole world, for example, government bond ETF, gold ETF, Hang Seng ETF and so on.

By making good use of ETF funds, you can invest in your favorite industries, sectors and markets, without spending too much time on research and analysis, and share the benefits brought by the rising price of the underlying assets.

Third, the arbitrage of ETF funds.

ETF funds can be traded in the primary market and the secondary market at the same time, and the time and frequency of quotation between the two parties are inconsistent, which may naturally lead to cross-market arbitrage opportunities.

However, due to the high threshold for purchasing ETF funds in the primary market, it usually takes 500,000 or even millions of funds to start.

Therefore, most professional institutional investors with deep pockets can generally capture arbitrage opportunities in the primary and secondary markets; However, the existence of many professional institutional investors makes arbitrage opportunities quickly filled in once they appear.

Therefore, the principle of no arbitrage not only appears in textbooks, but also is verified by the actual capital market all the time. It's not that there is absolutely no arbitrage opportunity, but the timing is very short.

To sum it up

ETF fund is an open index fund, which can be purchased in the primary market and traded in the secondary market.

There are many kinds of ETF funds that can meet the needs of different investors; Compared with ordinary funds, it has lower cost, more flexible transactions and more transparent information, which can be said to be an effective assistant for investors to complete asset allocation and layout. # Wealth Management Competition Season 3 #

ETF fund arbitrage does not need more professional investment technology, mainly the threshold of funds and the grasp of fleeting opportunities.