ETF is the abbreviation of exchange traded fund, which is translated into "transactional open index fund" in Chinese, also known as exchange traded fund. ETF is essentially an open-end fund, which is not essentially different from the existing open-end funds. But it also has its own distinct personality in three aspects: first, it can be listed and traded on the exchange, and investors can buy and sell ETF shares directly on the exchange like trading individual stocks and closed-end funds; Second, ETF is basically an index-type open-end fund, but compared with the existing index-type open-end fund, its biggest advantage is that it is listed on the exchange and the transaction is very convenient; Third, its purchase and redemption also has its own characteristics. Investors can only subscribe or redeem ETFs with a basket of stocks corresponding to the index, but not with existing open-end funds for cash subscription and redemption.

ETF's portfolio usually completely replicates the underlying index, and its net performance is highly consistent with the specific index pegged. ETF is a special hybrid fund, which overcomes the shortcomings of closed-end funds and open-end funds and integrates their advantages. ETF can track specific indexes, such as SSE 50 Index; Unlike open-end funds, ETF uses a basket of index stocks to purchase and redeem fund shares; Etfs can be listed and traded on exchanges.