What's the difference between etf funds and ordinary funds?
ETF funds combine the operating characteristics of closed-end funds and open-end funds, and are similar to the trading rules of stocks, so they are different from ordinary funds in five aspects: investment channels, trading methods, purchase and redemption mechanisms, transaction costs and tracking errors. Details are as follows:
1 investment channels
① The investment channels of ①ETF funds include on-site trading and off-site trading. Ordinary investors generally trade in spot and need to open a stock account.
② The investment channels of general funds are over-the-counter transactions, and investors can buy and sell through fund trading platforms, such as Alipay, Tian Tian Fund Network and WeChat.
2 transaction method
①ETF fund: similar to stock trading, buying and selling requires quotation waiting for others to accept the quotation, and some people accept the transaction cost, otherwise they can't sell it temporarily, and the trading system of T+ 1 is implemented.
② General fund: Investors purchase and redeem the fund by themselves according to the latest net value of the fund on the trading platform. At the time of subscription, the fund company converts the investor's funds into shares according to the net value, and at the time of redemption, the shares are converted into funds according to the latest net value. During the fund open day, investors can purchase and redeem at any time.
3 Purchase and redemption mechanism
1 ①ETF fund: a basket of stocks must be exchanged for fund shares or a basket of stocks must be exchanged for fund shares to purchase and redeem. The declared number is 65,438+000 shares or its integral multiple, and the part less than 65,438+000 shares can be sold, which requires a large amount of funds.
② General funds: Investors can purchase and redeem funds according to the fund trading rules, with a low threshold.
4 transaction costs
①ETF fund: ETF has a low transaction cost, and generally only receives transaction commission and no stamp duty. The transaction commission rate shall be subject to the charging rules of securities companies.
② General fund: subscription fee and redemption fee are charged, as well as management fee and custody fee. The specific rate standard varies from fund to fund. Generally, the shorter the holding time, the higher the rate, and the longer the holding time, the lower the handling fee or even no charge.
5 tracking error
ETF fund price includes transaction price and net value. When there is a difference between two prices, investors can arbitrage and earn the difference. When more people earn the difference, the difference between prices will become smaller and smaller, and the tracking error of ETF is better than that of ordinary funds.
The above are the five major differences between ETF funds and ordinary funds. Investors can choose their own fund investment methods according to their own trading needs.