On-exchange index funds and over-the-counter index funds are both categories of index funds. Due to differences in transactions, they are often compared. So what is the difference between on-exchange index funds and over-the-counter index funds? ? In what aspects do they manifest themselves?

1. Different trading mechanisms

OTC funds are bought and sold through fund companies, banks, and third-party fund sales platforms. We directly subscribe for fund shares through these channels.

In exchange funds, investors trade with other investors, that is, investors buy funds sold by other investors, similar to buying and selling stocks.

2. Different purchasing methods

OTC funds can be purchased through fund companies, banks, securities firms, and third-party sales platforms; on-site funds can only be bought and sold through securities trading software.

3. Different investment thresholds

OTC funds have very low investment thresholds; on-exchange fund trading is similar to stocks, and you need to buy at least 1 lot, which is 100 shares of the fund. Therefore, the funding threshold will be relatively high.

4. Rates are different

If you choose to buy OTC funds, the rates of banks, fund companies, and third-party fund platforms are also different. Now many third-party sales platforms have discounts, usually 10% off, no redemption fee for more than 3 years.

The fees for on-site funds depend on the commission of the securities firm where you open an account. The commission is the same as for securities transactions and can be discussed with the investment manager.

5. Liquidity is also different

The liquidity of on-exchange funds is relatively good, and the redemption time of fund redemption is faster; the redemption time of over-the-counter fund funds is relatively fast. slow.

6. The number of funds that can be selected is different

There are many OTC funds, so there is a lot of room for choice; on the other hand, the number of on-market funds is small and there are few types.

That’s all the above about the differences between on-market index funds and over-the-counter index funds. I hope it will be helpful to everyone. Warm reminder, financial management is risky, so investment needs to be cautious.