What's the difference between buying ETF funds and buying stocks?
1, different concepts.
Funds are issued by fund companies and are mainly used to invest in money markets, bond markets and stock markets. Stocks are issued by listed companies, which is the performance of capital ownership of listed companies.
2. The handling fee is different
Stock transaction fees include stamp duty, brokerage commission, transfer fees, etc. You don't need to pay stamp duty to buy ETFs, and the fees are less than those of stocks.
3. Different investment risks
Stocks are more risky. Etf is actually a portfolio, which contains not only one stock, but also the risk is dispersed to every stock in the portfolio, which is equivalent to diversification.
4. Different trading places
Common stock is traded on the floor through the stock exchange. ETF funds can be purchased or redeemed from fund companies and traded on stock exchanges like closed-end funds.
5. Different trading methods.
Some ETF funds implement T+0 transactions (such as cross-border ETFs, bond ETFs, money fund ETFs and gold ETFs); The stock trading time is T+ 1.
How to choose?
Stocks and ETFs have their own advantages, so there is no better way to put it. Investors should choose their own products according to their own actual situation.
ETF fund is an index fund that takes the components or commodities contained in the selected index as the investment object, and passively invests through complete replication or sampling replication according to the types and proportions of the component indexes. Its advantages are diversification of investment risk (less investment risk), low transaction cost, more convenient buying and selling (various buying methods), and arbitrage operation according to the diversity of its trading places.
The advantage of stocks is that investors have great autonomy (control is in their own hands). Although the risk is relatively concentrated, the return on choosing a good stock is quite rich, which is suitable for investors with strong risk tolerance and strong stock selection ability.