There are too many kinds of funds in the market. Although many investors have participated in the investment, they may not know what they are buying. The most common ones are index funds and tracking indexes, but there are different forms, some are on-site funds and some are off-site funds. What are the forms of common index funds? There are four kinds.

What are the forms of index funds?

1 ETF: ETF is a very accurate index fund form because it has a unique way of applying for redemption in kind. ETF exchanges a basket of stocks for ETF shares at the time of subscription, and replaces cash with a basket of stocks at the time of redemption. ETF funds also support floor trading, with a threshold of 100, which is suitable for most ordinary investors.

2LOF: It is the fund type with the most trading methods. It can be traded or redeemed on the spot or redeemed off the spot. On-site subscription in trading software can be sold directly on the site, but LOF cannot be sold on the site if it is purchased off-site, and it needs to be transferred to the on-site system through sub-custody.

3 graded parent fund: in fact, it is an ordinary OTC index fund. The difference is that it can be divided into A and B according to the rules. According to the regulatory requirements, the existing graded funds will be transformed in the later stage, and many graded parent funds will directly become ordinary index funds.

4ETF Linked Fund: It is a special OTC fund that invests in ETFs. Because ETF can track the index more accurately, ETF-linked funds can also track the index. The issuance of ETF funds is not easy, and many investors are not familiar with the purchase method of on-site funds. Choosing a fund linked to ETF is an option.

In the process of actually investing in index funds, ETF funds and LOF funds can be considered if they are traded in the market through stock accounts. If subscription and redemption transactions are conducted through OTC accounts, ordinary OTC funds, LOF funds and ETF-linked funds can be considered.