According to different investment methods, ETFs can be divided into index funds and actively managed funds. Most foreign ETFs are index funds. At present, ETFs launched in China are also index funds. ETF index fund represents the ownership of a basket of stocks, which refers to the index fund that is traded on the stock exchange like stocks, and its trading price and fund share net value trend are basically consistent with the tracked index.
Therefore, investors buying and selling an ETF is equivalent to buying and selling the index it tracks, and can get basically the same income as the index. Usually, it adopts a completely passive management mode, aiming at fitting an index, which has the characteristics of both stocks and index funds.
Fund characteristics:
Transactional open-end index fund is a special open-end fund, which not only absorbs the advantages that closed-end funds can trade in real time on the same day, but also allows investors to buy and sell the shares of transactional open-end index funds in the secondary market like closed-end funds or stocks. It also has the advantage that open-end funds can purchase and redeem freely. Investors can buy or redeem the shares of transactional open-end index funds from fund management companies just like buying and selling open-end funds.