1. the difference between trading places: ETF funds are index funds that can be traded on the exchange, and the trading hours are the same as those of the stock exchange, that is, 9: 30 a.m.-11:30 p.m. and 6:5438+0:00-3:00 p.m. on weekdays. However, in addition to on-site and off-site funds, index funds are traded through third-party fund sales platforms such as fund companies and banks, and investors can purchase or redeem fund shares from relevant sales organizations at a specific time on the trading day.
The difference in procedures: the handling fee of ETF funds is commission plus management fee, but compared with general index funds, the ETF rate will be relatively low. Specifically, the management fee of ETF funds is about 0.5% lower than that of general funds, so the investment cost will be lower.
3. Differences in dividend distribution methods: ETF funds are on-site funds, and the on-site funds only have cash dividends, while off-site index funds have two dividend distribution methods: cash dividends and dividend reinvestment. Among them, cash dividend means that the fund company distributes part of the fund income to investors in cash; Dividend reinvestment means that fund holders convert the cash from dividends into fund shares according to the net value of the fund on that day and then distribute them to investors. For investors, it means increasing the share of funds held and realizing interest rolling.
4. Differences in valuation methods: ETF absorbs the advantage that closed-end funds can trade in real time on the same day (closed-end funds and stocks are both in T+ 1 mode), which shows that the quotation of ETF funds is updated in real time and traded at real-time parity, and investors can trade ETF shares in the secondary market just like buying and selling stocks. As for the general OTC index fund, there is only one net value in a day, which is announced that night. That is, investors only buy a fund price on the same day, buy it on the same day, and confirm the subscription share on the second trading day.