LOF fund is a listed open-end fund, which can be purchased or redeemed off-site (fund company, bank counter or securities company counter, etc.). ) or floor trading (stock exchange). Today, we mainly want to know which investors LOF fund is suitable for. What are the advantages and disadvantages of LOF fund? The following small series analyzes that LOF funds are suitable for investors:

Which investors are LOF funds suitable for?

1, income-oriented investors

Because LOF fund mainly invests in a basket of stocks, and it is an active fund, mainly for the purpose of pursuing higher returns, so if investors want to pursue higher returns, it is recommended to trade LOF fund.

2. Short-term investors

The LOF fund in the venue implements the T+ 1 trading mode. Investors buy funds on the same day and can sell them for redemption on the next trading day, so the funds arrive faster and the trading speed is accelerated. Therefore, short-term investors are more suitable to buy LOF funds.

3. Investors who want to arbitrage

Since LOF funds can be traded in the market or redeemed outside the market, investors can also use this function to arbitrage and earn the difference. For example, if the price of LOF fund on the market is higher than that of LOF fund off the market, it can be purchased off the market and sold at a high price on the market; When the on-site price of LOF fund is lower than the off-site price, it can be bought in the secondary market and then redeemed off-site.

What are the advantages and disadvantages of LOF fund?

Advantages:

1, you can arbitrage.

Because LOF funds can be traded on or off the market.

2. The transaction speed is fast

The fund share can be sold at T+ 1, the sold fund can be used on the same day, and T+ 1 can be withdrawn, which speeds up the transaction.

3. The transaction cost is reduced.

Investors can reduce transaction costs through transactions in the secondary market.

Disadvantages:

1, the arbitrage capital requirement is higher.

LOF funds have a single transaction amount limit, so it is difficult for investors with less funds to arbitrage.

2. There are fewer types of funds.

LOF has fewer types of funds and may not be able to meet the investment needs of investors who want to invest in a portfolio.

3. Not suitable for fixed investment

The fixed investment of the fund is to automatically set the time and amount. LOF must be manually operated when trading, and the single amount is limited. Too little will increase the transaction cost, which is not cost-effective, and the expected income will also decrease.

LOF fund is suitable for investors.

1, short-term investors

The LOF fund in the venue adopts the trading mode of T+ 1 Investors can buy on the same day and sell on the second trading day. If the investor is a short-term investor, it is recommended to buy an on-site LOF fund.

2. Income-oriented investors

LOF fund mainly invests in a basket of stocks, and it is an active fund, focusing on the pursuit of income. If investors invest in funds mainly for the pursuit of income, then it is recommended to buy LOF funds.

3. Investors suitable for arbitrage

LOF funds can be purchased in the market or redeemed outside the market, so investors can use this function to arbitrage. When the spot price of LOF fund is greater than the off-site price of LOF fund, it can be purchased off-site, then transferred to custody and sold on the spot; When the price of spot LOLF funds is lower than that of OTC funds, they choose to buy them in the secondary market and then redeem them in the OTC market. Earn the difference through the above two operations and increase the extra income of investors.

The full name of ETF fund is "listening open-end fund", also known as transactional open-end index fund, which refers to the open-end fund with variable fund share listed on the exchange. ETF funds take a specific index as the tracking object, so that there is little difference between the change trend of the portfolio and the change trend of the index, so as to make a profit, and the general income index is roughly the same.

ETF fund features:

1, low handling fee

When trading in the secondary market, only the transaction commission will be charged, which will not exceed three thousandths of the transaction amount. The minimum single transaction is 5 yuan.

2. Various trading places.

It can be purchased and redeemed in the primary market or traded in the secondary market. There are all kinds of trading places.

Step 3 arbitrage

It is precisely because there are many trading places that investors can use this feature to arbitrage between different trading places, earn the difference and get extra income.

4. Transparent operation

ETF funds take relevant indexes as investment targets, mostly index funds, and the stock selection rules are more open and transparent. The daily ups and downs of ETF funds and the proportion of positions are publicly displayed, which helps investors to grasp the investment opportunity and judge the follow-up investment direction.

The difference between ETF fund and LOF fund;

1, transaction method

ETF funds exchange fund shares and a basket of stocks with investors when purchasing or redeeming; LOF funds exchange cash with investors. ETF funds are traded at market price and in real time; LOF funds are traded at a net value, with only one trading price per day, and the income is calculated according to the net value displayed at the close.

2. Place of purchase and redemption

ETF funds can only be traded on stock exchanges; LOF funds can be traded on the stock exchange or online.

3. Fund type

ETF is an index open-end fund, which belongs to passive fund. LOF funds can be passive index funds or active management funds.

4. Quotation frequency

ETF funds in the secondary market trading, every 15 seconds can provide a fund net worth quotation; LOF fund only provides a quotation of fund net value once a day, that is, the fund net value at the close of the day.

Not necessarily. Funds are not guaranteed to make money.

The fund's income is related to the price fluctuation of securities in the portfolio, which may be caused by market factors or internal factors of the company. If market factors have a negative impact on most stocks, then funds will also be affected. Similarly, if a specific industry or company has problems, it may also lead to poor performance of the fund.

In addition, the performance of the fund is also affected by the ability of the management team and the wisdom of decision-making. If the fund manager can't adapt to market changes and make correct investment decisions, the fund may not perform well.

In short, the fund's income is related to market conditions, fund manager's ability, fund type and other factors. Investors should choose their own funds according to their risk tolerance and investment objectives, and carry out risk control and long-term holding. At the same time, different funds also have different risk and return characteristics. Investors should carefully study the historical performance, management team, investment strategy and other information of the fund and make wise investment decisions.