First, don't worry too much about the big discount. Closed-end funds always determine the total amount of issuance in advance. Except for some special circumstances such as the need to raise funds, the fund share will remain unchanged. Transactions can be transferred after listing. There are many factors such as profit-seeking behavior and information asymmetry in the market, which leads to the deviation between the market price and the net value of fund units.
ETF options, on the other hand, can avoid the risk of large discount of such funds, coexist in the primary market or the secondary market, and investors can also carry out cross-market arbitrage.
Second, the trading method is flexible, which is convenient for the trading of open-end fund securities. Investors can purchase and redeem their own funds at any time, and the total amount of issuance is not fixed. However, if investors divide frequently, there will be higher redemption fees, which will increase the transaction cost of the fund.
However, SSE 50ETF is different. Its transaction means are convenient and can avoid the transaction cost of open-end funds. The subscription and redemption of SSE 50ETF are all carried out in a package share. If you want to redeem the share of SSE 50ETF, the final redemption is the share corresponding to SSE 50 constituent stocks, not cash. This greatly reduces the stock trading volume of the fund and saves the transaction cost for the fund. On the other hand, there is no need to bear the impact cost of redemption by short-term investors.
Third, the index has more advantages than the stock. The management fee and transaction fee of SSE 50ETF are very low, the management fee is 0.5% and the custody fee is 0. 1%, which is lower than similar investments, and it can save a lot of money for long-term investors. SSE 50ETF is a passive index fund. It pays attention to the trend of the index, closely tracks the constituent stocks, weights and trends of the index, and does not need to analyze the Shanghai Stock Exchange. Buying SSE 50ETF is equivalent to buying and selling multiple stocks of the index it tracks.
Four. The discount of arbitrage avoidance fund SSE 50ETF is the first ETF in the A-share market and the only on-site option target in the domestic market at present. It is a trading tool that can meet the investment needs of investors such as investment, speculation, arbitrage and hedging. The difference between the secondary market price and the net value of the fund unit after deducting the relevant transaction costs is the arbitrage income of investors. The arbitrage activities of investors will narrow the difference between the secondary market price and the net value of the fund unit, so that the secondary market price of ETF tends to balance with the net value of the fund, thus avoiding the problem of large discount of closed-end funds.