What are the enhanced ETF funds?
Four of the first five index-enhanced ETF products have been sold, including China Merchants CSI 300 Enhanced ETF, Cathay Pacific CSI 300 Enhanced ETF, Huatai Bairui CSI 500 Enhanced ETF and Jing Shun Great Wall CSI 500 Enhanced ETF. Southern CSI 500 enhanced ETF also has funds.
Enhanced ETF can be simply understood as the form of index-enhanced fund superimposed ETF, which combines the active investment mode of index-enhanced fund and the convenient transaction attribute of ETF-giving full play to the active investment and research ability of fund managers in investment strategy, tolerating certain tracking deviation and tracking error, striving to obtain the income beyond the index, while maintaining the existing ETF mode in operation mode, with high transparency and convenient transaction.
What are the advantages of enhanced ETF?
Compared with the existing passive index ETF, the enhanced ETF has two main characteristics: on the one hand, it enhances the active management ability and strives for excess returns. On the other hand, the enhanced ETF does not need to completely copy the index stocks, and the advantage of active management enables managers to quickly adjust their positions and respond to risk events more flexibly. Specifically, enhanced ETF funds have the advantages of "three highs and one low":
First, the stock position is high. At present, index-enhanced funds in the market usually hold 85%-95% positions, while enhanced ETF funds can further break through the existing 95% position limit, and theoretically the highest position can reach 100%. Although it raises certain risks, the income elasticity will be higher.
Second, the utilization rate of funds is high. Enhanced ETF funds have the characteristics of ETF physical redemption and secondary market trading, which can reduce the impact cost brought by fund redemption. Can improve the utilization rate of funds.
Third, the transparency of positions is high. Enhanced ETF will disclose the position of the previous day in the daily subscription and redemption list announcement, which improves the transparency of information for the basic people.
Fourth, the management rate is low. We said that if you buy a fund, you will earn it if you save it. The management fee of enhanced ETF is much closer to the people. For example, the China Merchants CSI 300 Enhanced Strategy ETF being issued has a management fee of only 0.5% and a custody fee of 0. 1%. After this 1 year, the light management fee will be saved a lot. For the basic people, buying and selling ETFs in the market can also save redemption fees, and perhaps only one tenth of the minimum commission for brokerage transactions is required.
Enhanced ETF is an actively managed ETF. Although it is a new thing in China, it is very mature in overseas markets.