Custody fund means that fund managers have full freedom of decision-making and punishment when managing funds; It can also be understood that the fund manager manages the fund's portfolio according to the principles and procedures of "rule-based" (referring to the pre-specified rules on adding or deleting constituent stocks in the portfolio, etc.). ) and "selection" (referring to the stock recommendation list publicly disclosed by securities companies and a basket of securities portfolios designed by fund managers accordingly. ).

As far as technology is concerned, the technologies of management index combination and management initiative combination are not mutually exclusive. For example, when tracking the Wilshire 5000 total stock market index, many index funds use the same sampling replication method as some ETF funds tracking the MSCI national index. At the same time, these two types of funds can use relative value strategy and other investment strategies to improve fund performance or reduce fund costs. Therefore, the classification standard of managed ETF mainly depends on the transparency of portfolio information disclosure of specific ETF products, the marketing strategy adopted by ETF products and the investment objectives and strategies determined by ETF products.

When choosing securities, fund management is based on the specific research and judgment of a single company and financial instruments, and the composition of the fund reflects the micro-level decision-making. On the contrary, passive funds are designed to be consistent with the performance of the market or index, and their composition reflects the composition of the market or index.