ETF (Exchange-traded Fund) is a trading index fund (open-ended).
On-site: refers to the A-share market and the market for stock trading.
Off-site: refers to places where funds are sold on a commission basis, such as banks and counters of stock exchanges; Fund website.
Fund Type: (in China)
Funds with ETF suffix: all index funds.
Funds with LOF suffix: they can be index, stock, mixed partial stock and mixed balanced funds.
Fund trading place:
Funds with ETF suffix: generally traded on the floor, starting from 100. Off-site is a block trade: a package of stocks for fund shares; Or a basket of shares of the Exchange Fund; It can only be converted into cash after being converted into fund shares. The off-exchange starting point is a basket of stocks equivalent to 6,543,800 fund shares. Retail investors generally do not participate in this off-site way.
Funds with suffix LOF: They can be traded on and off the market, but they cannot interoperate on and off the market. The same fund, due to different custody systems, cannot be listed and traded if it is purchased over the counter; Things bought in the market cannot be redeemed in the market. If you want to change OTC funds into OTC funds, you need to switch fund custody; Or conversely, Dallas goes to the auditorium of the market, and such funds are bought and sold like stocks; Over-the-counter funds can only be purchased or redeemed. (There are also big deals off-site)
Net value and market price:
Funds with suffix LOF and ETF have net value and market price, and are purchased or redeemed off-site according to net value; Buy or sell at the market price on the floor. So they have a discount rate from both the on-site and off-site perspectives. Discount rate = (net value-market value)/net value. The market price below the net value is a discount; A market price higher than the net value is a premium.
Arbitrage: (different from short-term fast-forward and fast-out profit in the field)
Make cross-market profits by using the on-site and off-site markets of LOF and ETF funds. That is, when the discount is high, the market price in the market is low and the net value outside the market is high. When the premium is high, the off-site low-net-worth subscription, on-site high-market selling. (Note: There is a "fund custody transfer" inside and outside the venue, which takes two days).
Novices need to open an account, bring their ID cards to the securities company to open a Shanghai and Shenzhen trading account, handle the bank transfer custody procedures, and open online trading, and they are not limited to buying or selling any variety. The capital requirements are very low. Now in theory, the minimum purchase of 100 shares at a time is less than 100 yuan or a little more than 100. However, most people rarely buy only 100 shares. The form of buying and selling is the same as buying and selling stocks, but the difference is that stamp duty is exempted!