ETF is the abbreviation of exchange traded fund, which is translated into "transactional open index fund" in Chinese, also known as exchange traded fund. ETF is essentially an open-end fund, which is not essentially different from the existing open-end funds. But it also has its own distinct personality in three aspects: first, it can be listed and traded on the exchange, and investors can buy and sell ETF shares directly on the exchange like trading individual stocks and closed-end funds; Second, ETF is basically an index-type open-end fund, but compared with the existing index-type open-end fund, its biggest advantage is that it is listed on the exchange and the transaction is very convenient; Third, its purchase and redemption also has its own characteristics. Investors can only subscribe or redeem ETFs with a basket of stocks corresponding to the index, but not with existing open-end funds for cash subscription and redemption. ETF's portfolio usually completely replicates the underlying index, and its net performance is highly consistent with the specific index pegged. For example, the net performance of SSE 50ETF is highly consistent with the rise and fall of SSE 50 index. Exchange-traded funds (ETFs) are open-ended securities investment fund products listed on the exchange, and the trading procedures are exactly the same as those of stocks. The assets managed by ETF are stock portfolios. The types of stocks in this portfolio are the same as those in a specific index, such as the SSE 50 Index, and the number of each stock is consistent with the proportion of the constituent stocks of this index. The transaction price of ETF depends on the value of its stock portfolio, that is, the "net asset value of unit fund". ETF is a special hybrid fund, which overcomes the shortcomings of closed-end funds and open-end funds and integrates their advantages. ETF can track specific indexes, such as SSE 50 Index; Unlike open-end funds, ETF uses a basket of index stocks to purchase and redeem fund shares; Etfs can be listed and traded on exchanges. ETF is easy to understand and highly accepted by the market. Since the first ETF product of 1993 was launched in the United States, ETF has developed rapidly in the world. Since 10, more than 280 ETFs have been launched in 12 countries (regions) around the world, and the assets under management have reached more than $2 10 billion. Compared with closed-end funds, ETF is characterized by open-end funds, and the share scale can be changed. If the subscription volume is large, its scale will be large, and vice versa. After the establishment of closed-end funds, the scale will generally not change (it will only increase when it is raised), and fund holders can't ask for redemption of fund shares, but can only transfer them through secondary market transactions. Because closed-end funds do not purchase and redeem fund shares according to the net value of the day, the price and net value of closed-end funds often deviate greatly, and closed-end funds usually have large discount transactions. ETF is essentially an open-end fund, and fund holders can purchase and redeem the fund during trading hours. The existence of arbitrage mechanism makes its trading price basically consistent with its net value. Compared with the traditional open-end fund, the characteristic of ETF is that although ETF is also an open-end fund, ETF only accepts the subscription and redemption of "founding unit" scale (such as 6,543,800,000 shares), and the subscription and redemption is a basket of stocks (index stocks), which is different from the situation that ordinary open-end funds accept cash subscription and redemption. The biggest difference between the two is that ETFs are listed and traded on the exchange at the same time, and investors can buy and sell ETFs at market prices at any time during the trading hours of the exchange, and investors know the trading prices at that time; Ordinary open-end funds can only be traded over the counter through purchase and redemption, and can only be purchased and redeemed according to the net value of the fund after the stock market closes (announced the next day). Investors won't know the actual transaction price until the day after the order is issued. If the market fluctuates greatly during the trading hours of the exchange, investors can trade ETFs to reflect the latest information and market changes in real time and gain new opportunities or avoid losses. Even if the investors of traditional open-end funds make the right decision long before closing, they may eventually get an unsatisfactory closing price, thus falling into a situation where correct judgment is still useless. In terms of rate, the annual management fee of ETF is much lower than that of actively managed stock open-end funds and traditional index funds. Finally, the transparency of ETF is much higher than that of traditional open-end funds. In practice, fund managers usually publish the portfolio structure of ETFs before opening ETFs every day, while traditional funds generally publish their portfolios once a quarter. Trading open index fund (ETF) is a kind of securities investment fund product listed on the exchange, and the trading procedure is exactly the same as that of stocks. The assets managed by ETF are stock portfolios. The types of stocks in this portfolio are the same as those in a specific index, such as the SSE 50 Index, and the number of each stock is consistent with the proportion of the constituent stocks of this index. The transaction price of ETF depends on the value of its stock portfolio, that is, the "net asset value of unit fund". ETF is a special hybrid fund, which overcomes the shortcomings of closed-end funds and open-end funds and integrates their advantages. The research shows that ETF has a broad market prospect in China, which not only helps to attract the savings of insurance companies, QFII and other institutions and individuals to enter the stock market and increase the proportion of direct financing, but also enlivens the secondary market transactions and increases the depth and breadth of the market.