1. Where is it good to buy ETF funds

ETF funds, that is, transactional open-end index funds, are open-end funds with variable fund shares, which have the characteristics of both stocks and index funds, combine the advantages of closed-end and open-end funds, diversify investment and reduce investment risks, and at the same time, have lower transaction costs.

2. What is ETF

ETF fund, namely transactional open index fund, which is an open-end fund with variable fund shares listed on the exchange. It combines the operating characteristics of closed-end funds and open-end funds. Investors can purchase or redeem fund shares from fund management companies, and at the same time, they can buy and sell ETF shares in the secondary market at market prices like closed-end funds. However, the purchase and redemption must be exchanged for fund shares with a basket of stocks or with fund shares.

Third, the purchase method of ETF

Investors can purchase ETFs in two ways:

1. They can purchase from fund managers according to the net value of the fund on that day (the same as ordinary open-ended funds), but the minimum purchase share of ETFs is usually large, so it is difficult for ordinary investors to purchase in this way;

2. You can also directly trade with other investors in the stock exchange. The trading process is similar to that of stocks. The price of the transaction is determined by both the buyer and the seller, which is often different from the net value of the fund at that time (just like ordinary closed-end funds).

iii. Market impact of ETF

1. Increased market appeal of the exchange

The launch of ETF has enriched the trading varieties in the market, improved the variety layout, and helped the market attract more powerful stocks of large-cap blue-chip companies to join.

2. Increased investment opportunities for investors

ETF trading provides investors with the opportunity to invest in a specific sector, a specific index, a specific industry and even a specific region, and can also greatly improve the efficiency of the use of fund assets, avoid the transaction costs and tax burden added by constantly adjusting the portfolio to cope with frequent redemptions, and help protect the long-term interests of fund investors.

3. The influence of ETF trading on the trading volume of the stock market is uncertain, which may increase market volatility.

As ETFs generally adopt the procedural trading mechanism, that is, buying and selling the stock portfolio of the underlying index in batches, the launch of ETF may aggravate the volatility of China's stock market and have a "helping up and helping down" effect on the stock market.