ETF index funds traded on the exchange are increasingly favored by investors because of their low cost and accurate tracking of indexes. However, most people do not look at the time line when purchasing, resulting in unnecessary cost expenditures.

Qing Shu, please note that when buying ETF funds, try to buy when the white line is below the red line.

This article has 1100 words and takes 5 minutes. The full name of ETF funds is Exchange Traded Funds ("ETF" for short). Its advantages are low cost and convenient transactions.

At present, ETF is one of the lowest-cost funds. Generally, ETF funds have a management fee of 0.5% and a custody fee of 0.1%, while active funds generally have a management fee of 1.5% + 0.25%. In comparison, ETFs are only 1/3 of active funds. Moreover, ETFs

When trading on a brokerage exchange, the commission is generally 2.5% per thousand (you may get 10,000% if you catch up with brokerage promotions), which is even cheaper than over-the-counter funds with a 10% discount and 1.5% per thousand.

Because ETF redemptions are traded in the form of a basket of stocks, there is no need to set aside funds to deal with redemptions, and the tracking index is more accurate than OTC funds.

ETF funds are traded on the market at T+0 hours and have better liquidity.

ETF funds are now becoming more and more popular among investors.

However, in addition to formulating investment strategies, investing in ETFs does not involve directly trading with a brokerage firm. There are still things to pay attention to.

When you open the operation page of a brokerage, you will see a time-sharing chart that looks like an electrocardiogram. Many people turn a blind eye to it. It is estimated that most people cannot understand it. Today, Qing Shu will come to learn more about it.

The red line represents the actual net asset value of all stocks corresponding to the ETF during this period, the white line represents the trading price of the ETF in the secondary market, and the yellow line is the average price of the day.

If your brokerage time-sharing line does not have a red line, it is recommended to try another brokerage trading software and try the Oriental Fortune you are using.

Everyone wants to get the best value for their money, and it is certainly more cost-effective to trade when the price is lower than the value.

When buying ETFs, of course choose to buy when the white line is below the red line and the trading price is lower than the actual stock net asset value.

To popularize science, if the white line is at the bottom and the red line is at the top, the transaction price is lower than the actual value, which is called a discount.

If the red line is below and the white line is above, the transaction price is higher than the actual value, which is called a premium.

Under normal circumstances, the price fluctuates up and down the average price of course. It would be more perfect if the white line is purchased below the yellow line.

Because ETFs have an arbitrage mechanism, the transaction price is not much different from the actual value of the stock.

But it would be very dangerous to buy a fund when there is a high premium.

For example, Boshi S&P 500 ETF (513500) stopped subscribing at the beginning of 2016 due to insufficient foreign exchange purchase quota.

From July 2016 to the end of December, the S&P 500 ETF rose as high as 43.19%. During the same period, although the US S&P 500 Index also hit new highs repeatedly, it actually only rose 7.86%.

On December 21, the closing price was 26.72% higher than the reference net value.

Boshi announced that the S&P 500 ETF will open for subscription on the 28th. At this time, a large number of arbitrage funds will first subscribe based on the net value and then sell based on the transaction price.

The high premium was wiped out at once, causing fund trading prices to plummet.

Novices who don't care about discounts and premiums are being trampled to pieces. It's too miserable.

ah?

Do you want to learn ETF arbitrage?

ETF subscription requires an integer multiple of 1 million shares. For Boshi S&P 500, it requires more than 1 million.

On February 21, this fund suspended subscription again, and now has a 7.8% premium.

When this fund opens for subscription, let’s talk about arbitrage.