I. Basic definitions
ETF is an open index fund traded through stock exchange, which is basically a way to buy securities products. ETF usually consists of a basket of stocks and/or other securities, so its net value usually fluctuates up and down, reflecting the change of index. ETF can also track different investment styles and industries, including stocks, bonds, commodities and so on.
Second, advantages
The first is low cost. The management cost of ETFs is much lower than that of most Public Offering of Fund, because ETFs don't need to recruit sales staff and manage funds specially.
Secondly, ETF is an efficient and flexible investment method. Exchange-traded funds can be traded on stock exchanges, so they can be bought and sold easily. Compared with open-end funds, ETFs can short and earn the income from market decline.
In addition, ETF has many other advantages, such as transparency and limited investment assets.
Third, the type
There are many kinds of ETFs, which can track stocks, bonds, commodities, foreign exchange, real estate, markets and so on. Among them, the most common ETF is stock ETF, which tracks stock indexes, such as SP500 and Nasdaq.
Four. Related risks
The investment risk of ETF mainly comes from block trading, agency risk and liquidity risk, but the risk of ETF is relatively low. If the risk is well controlled, ETF can seize the market opportunity and realize the income.
Verb (abbreviation of verb) application
ETF has been widely used in the capital markets of many countries and is a very effective investment method. In developed countries such as the United States and Europe, the application of ETF has been very mature, covering almost all investment asset classes. In China, the application of ETF is also being promoted and popularized. In recent years, more and more investors have begun to choose ETF as their investment method.