ETF is the English abbreviation of Exchange Traded Fund. The Chinese translation is "traded open-end index fund", also known as exchange-traded fund.

ETF is an open-ended securities investment fund product listed and traded on an exchange. The trading procedures are exactly the same as stocks.

The assets managed by ETFs are a basket of stock portfolios. The types of stocks in this portfolio are the same as the component stocks included in a specific index, such as the Shanghai Composite 50 Index. The number of each stock is consistent with the proportion of the constituent stocks of the index. ETF trading

The price is determined by the value of the basket of shares it owns, known as the "unit fund net asset value."

The investment portfolio of an ETF usually completely replicates the underlying index, and its net value performance is highly consistent with the specific index it is focused on.

For example, the net value performance of the SSE 50 ETF is highly consistent with the rise and fall of the SSE 50 Index.

ETFs are also known as partially closed open-end funds or partially open closed-end funds.

Investors can buy ETFs with cash or a portfolio of stocks, or they can buy and sell them on the secondary market.

The vast majority of ETFs track a composite or industry index.

Investors can also use the subscription and redemption mechanism for arbitrage.

That is, when the price premium of ETFs is too high, institutional investors will use the continuous issuance mechanism to subscribe for ETFs at a net price lower than the market price, and then sell the ETFs in the secondary market to make a profit.

When the relative discount of ETFs is too large, institutional investors can purchase ETFs in the secondary market at a price lower than the net value. When a creation unit is reached, they can use the redemption mechanism to exchange ETFs for stocks, and then cash out the stocks to make a profit.

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