First of all, thank LZ for asking questions. Second, we should have a clear understanding of these basic concepts. Third, let's talk about the difference between ETF and LOF: Although both ETF and LOF are listed open-end funds, and both have designed arbitrage mechanisms, from the design of several LOF products on the market and SSE 50 ETFs, the difference between them is: 1, ETF is mainly a passive investment fund product based on a certain component index, which is the product of financial innovation, while LOF's innovation lies in the innovation of trading methods, which is not a fund product itself, but only. 2.ETF subscription and redemption have a high starting point, and most of the arbitrageurs are institutional investors; LOF subscription and redemption have a low starting point, which can be carried out by any investor. 3.ETF's primary market is a package of stocks for subscription and redemption, while LOF, like the current open-end funds, realizes cash subscription and redemption in the primary market. For example, when the market price of the fund is higher than the net value of the fund shares, the arbitrage operation method of SSE 50ETF is "buy a package of stocks → buy SSE 50ETF fund shares → sell fund shares in the secondary market"; The arbitrage operation of LOF is "buying fund shares in the primary market → selling fund shares in the secondary market". 4. The arbitrage of 4.LOF requires cross-system registration, which takes at least 3 days. Because the arbitrage time of LOF is long, it needs to bear greater risks, and investors generally do not arbitrage easily; The arbitrage risk of ETF is small, so more investors try ETF arbitrage. 4. What is the difference between ETF and closed-end fund and open-end fund? The essential difference between ETF and closed-end fund and open-end fund is: 1, and the trading mode of ETF is different from that of general open-end fund. It can be listed and traded on the stock exchange, just like buying and selling stocks. 2. The subscription and redemption mechanism of 2.ETF is different from the general open-end fund. Its subscription and redemption must use a basket of stocks (or a small amount of cash) for fund shares or use a basket of stocks (or a small amount of cash) for fund shares. Because of this special physical purchase and redemption mechanism, when there is a difference between the transaction price in the ETF secondary market and the net value of the fund unit, investors can carry out arbitrage trading. 3. The price performance of 3.ETF is different from that of general closed-end funds. The arbitrage brought by the physical purchase and redemption mechanism ensures that the market price of ETF is basically consistent with the net value of its fund unit, thus avoiding the widespread discount problem of closed-end funds. -.The basic operation mode of ETF is shown in the following figure:-. From the basic operation mode of ETF, we can see that ETF has two markets: primary market and secondary market. Investors can buy and redeem a basket of stocks in the primary market, or buy and sell ETF units in cash in the secondary market. When there is a big deviation between the market price of ETF and the net value of fund shares, investors can use the subscription and redemption mechanism for arbitrage trading. For example, when the market price of ETF is higher than the net value of the fund unit, the arbitrage operation method is: "buy the fund stock basket->; Purchase ETF fund shares-> Sell fund shares in the secondary market. " Arbitrage income is approximately equal to "(the secondary market price of the fund-the net value of the fund unit) × the number of fund shares-the transaction cost of buying the stock basket and selling the fund shares". Relevant tip: ETF's subscription and redemption is based on a basket of stocks, with a high starting point. If you participate in the subscription and redemption of SSE180TF, the fund share must be above 300,000. -.ETF is not only the best choice for indexed investment, but also suitable for active investors. For investors who actively choose stocks, ETF can be used as the core shareholding to ensure that the return on investment can be linked to the broader market and will not miss the opportunity of the broader market to rise. At the same time, according to my own research on the stock market outlook, I can choose individual stocks or some actively managed investment funds. -.ETF has all the benefits of indexed investment, such as diversification, good transparency and simple operation. In addition, due to the particularity of ETF trading mode, ETF has more advantages than general index funds: 1, ETF tracks the index more closely, and the tracking error is smaller than other types of index funds. 2.ETF's unique physical purchase and redemption mechanism helps to reduce the overall cost of ETF funds. Compared with general closed-end or open-end funds, the management cost of ETF is the lowest among all types of index funds. 3.ETF trading also combines the characteristics of stock trading and can be traded directly in the secondary market. Compared with the general open index fund, using ETF for index investment can be traded in real time, and the price can be grasped at any time, which is more flexible. It can be said that ETF is the best choice for indexed investment. According to the different investment methods, ETFs can be divided into index funds and actively managed funds. Most foreign ETFs are index funds, and SSE 180ETF is also an index fund. Its investment feature lies in "copying index", and its investment goal is to achieve the basic consistency between fund returns and index ups and downs. Its stock portfolio is only adjusted with the adjustment of the constituent stocks of the underlying index, which is also called "passive management". Equity funds are generally actively managed funds, and the investment goal is to pursue income beyond the target index. The investment method is that the fund manager selects stocks, allocates industries and assets and buys and sells them at any time according to the changes in the market environment, which is also called "active management". Compared with the two, ETF's "passive management" management fee is lower, the risk is more dispersed, and the investment portfolio is more transparent. Investors only need to care about the rise and fall of the index, without considering the risk of individual stocks and guessing the investment preferences of fund managers. The operation is simple and clear. -For long-term investors, short-term market fluctuation is not the basis for judging investment value; For short-term investors, the market will not rise or fall forever, and the fluctuation of the index just provides them with opportunities for band operation; For those investors who are unwilling to take risks, ETFs also provide arbitrage opportunities and gain additional income.