First of all, the advantages of ETF over direct investment in stocks are:
1 Like closed-end funds, there is no stamp duty.
2. Buying an ETF is equivalent to buying an index portfolio. For example, the price trend of the ETF with the SSE 50 index as the target should be consistent with the SSE 50 index, so buying the SSE 50 index ETF is equivalent to buying 50 blue-chip stocks, which can achieve the effect of diversifying risks for small and medium-sized investors. .
3. In terms of portfolio transparency, the SSE 50 Index is compiled by authoritative organizations, and the composition of the ETF corresponding to the SSE 50 Index is quite transparent. Investors can directly invest in an ETF instead of investing in a basket of stocks.
Second, the market impact of ETF funds:
As an indexed product, ETF trading also provides investors with opportunities to invest in specific sectors, specific indexes, specific industries and even specific regions. Those indexes targeting specific sectors will not only continue to play a role in revealing prices, but also be used as investment tools for investors.
Moreover, this kind of ETF without cash management can greatly improve the efficiency of fund assets, avoid the transaction cost and tax burden increased by constantly adjusting the portfolio in response to regular redemption, and help protect the long-term interests of fund investors.
Three. exchange traded funds
ETF fund generally refers to trading open-end index fund, also called exchange-traded fund (ETF), which is an open-end fund with variable fund share.
Transactional open-end index fund is a special type of open-end fund, which combines the operating characteristics of closed-end fund and open-end fund. Investors can buy or redeem fund shares from fund management companies, and at the same time, they can buy and sell ETF shares in the secondary market at the market price like closed-end funds. However, the purchase and redemption must use a basket of shares for fund shares or use a basket of shares for fund shares. Because there are both secondary market transactions and subscription and redemption mechanisms, investors can carry out arbitrage transactions when there is a difference between the market price of ETF and the net value of fund units. The existence of arbitrage mechanism makes ETF avoid the common discount problem of closed-end funds.