About how to arbitrage, we have to start from the root. According to whether the fund share can be increased or redeemed, funds can be divided into open-end funds and closed-end funds.
The scale of closed-end funds has been set before the issuance. Once the issuance is completed and the subscription is over, the subscription can no longer be redeemed. If you want to change your money into money, you must trade it in the secondary market.
Development funds are completely different. When the promoters of open-end funds set up funds, the total scale of fund units or shares is not fixed, and investors can purchase and redeem them at any time, but open-end funds are not traded in the secondary market unless otherwise specified.
Just mentioned that open-end funds are not traded in the secondary market except for special provisions, but if some open-end funds can be listed and traded, the situation will be completely different. Next, listed and traded open-end funds will make a grand debut!
Listed and traded open-end funds refer to securities investment funds whose fund shares are listed and traded on the stock exchange, and both sides of the fund are investors. For example, transactional open-end index funds (ETFs) and listed open-end funds (LOF).
Let's take ETF as an example: the traditional ETF trading mechanism has two layers: first, investors can purchase and redeem ETF shares in the primary market at any time during trading hours; Secondly, in the secondary market, ETFs are listed on the exchange, and investors can buy and sell ETF shares at the market price.
When the secondary market price of ETF is higher than the reference net value of its fund shares by a certain margin, investors can buy ETF shares and then sell them in the secondary market at a higher price to obtain arbitrage income; When the secondary market price of ETF is below a certain range, investors can buy in the secondary market and then redeem it from the primary market.
Take the currency ETF as an example
Because the risk coefficient of money fund is the lowest, its arbitrage space is relatively small, but if the amount of funds is large, it can be operated many times to obtain income. Basically, one of the arbitrage principles of ETF is this. Of course, there are arbitrage between futures spot markets, arbitrage between different indexes and so on. These arbitrage models have the same principle, but they require higher professionalism of operators, so they are not operable for individual investors.
Of course, if you find it troublesome to watch the disk in real time, there is another way to get extra profits. You can check the basic information of funds online, and the interest of some money funds is very particular. For example, the interest of some funds is calculated on the day of purchase, not on the day of sale (buying on Friday and selling on Monday is three days' interest). Then make a combination with the reverse repurchase of government bonds I mentioned before (if you don't remember, you can read my previous article on reverse repurchase of government bonds), lend the reverse repurchase on Thursday, and return the funds to your account on Friday to buy money funds. After selling on Monday, you can continue to invest in other securities and charge interest twice on Saturday and Sunday. Why not?