1, trading rules
Both index funds and ETF funds invest in the constituent stocks of the index, but open-end index funds are generally traded in the primary market, such as Alipay, WeChat and JD Finance. ETF funds need securities accounts to trade in the secondary market, and the trading method is similar to that of stocks. Index funds can be automatically deducted through trading software, and ETFs need to be purchased manually.
2. Transaction scale
The minimum redemption unit of index funds is generally small, and the purchase threshold is relatively low, which can be bought at 100 yuan. The minimum buying unit of ETF fund is 1 lot, and the minimum selling unit is 1 lot, that is 100 lot. ETF is difficult to purchase and has high capital requirements, so it is not suitable for ordinary investors, but ETF funds can be bought and sold in the secondary market.
3. Transaction rate
ETF transaction is a two-way charge, because it uses physical redemption, and the rate is actually relatively low. Class A index funds need income subscription fees, and if the funds have been held for more than two years, they can be exempted from redemption fees. Class C index funds do not charge subscription fees, but may charge additional sales service fees. To sum up, the transaction rate of index funds is higher than that of ETF.
4. Tracking error
Theoretically, ETFs can operate in Man Cang, while index funds usually need to keep 5% cash position, so the tracking error of ETFs is generally smaller than that of index funds.
The above content about the difference between index funds and etf funds, I hope it will help you. Warm reminder, financial management is risky and investment needs to be cautious.