The full name of ETF is exchange traded fund. It combines the operating characteristics of open-end funds and closed-end funds. Investors can not only buy or redeem fund shares from fund management companies, but also buy and sell ETF shares in the secondary market at market prices like closed-end funds.

Specifically, ETFs can be bought and sold at any time during the trading day like stocks, providing investors with more trading opportunities.

Because it combines the operating characteristics of open-end funds and closed-end funds, investors can choose to purchase or redeem fund shares or buy and sell ETF shares in the secondary market, which provides investors with more choices.

It should be noted that the subscription and redemption of ETFs can only be carried out at the counter of designated brokers, not at the exchange. At the same time, the subscription and redemption of ETF can only be carried out with a basket of stocks corresponding to the index. Therefore, investors need to understand the relevant trading rules and precautions when conducting ETF transactions.

Introduction of advantages

ETF, like the familiar closed-end fund, can be bought and sold on the exchange in the form of small "fund units". Similar to open-end funds, ETF allows investors to purchase and redeem continuously, but when ETF redeems, investors get a basket of stocks instead of cash, and they are allowed to purchase and redeem after reaching a certain scale.

Compared with closed-end funds, ETFs are listed on exchanges, just like stocks, which can be traded at any time in a day. The difference is that ETFs are more transparent. Since investors can purchase/redeem continuously, the frequency of asking fund managers to announce their net worth and portfolio is also accelerated accordingly.