Funds can be divided into active funds and passive funds, which are suitable for different types of investors, but many investors who just started investing in funds don't know how to distinguish between active funds and passive funds, so how do they know whether the funds are active or passive?

How do you know whether the fund is active or passive?

Generally, you can know whether a fund is active or passive by its name and trading places. The method of distinction is as follows:

1ETF is a passive fund, and ETF is an exchange-traded fund, which completely replicates the trend of the index. We can buy and sell such funds from the secondary market;

2ETF connection has a certain initiative, most of the assets are used for investment in ETF, and a small part can be used for active configuration.

3 enhanced funds also have some initiative. Generally, more than 90% of the funds are used to track the index, and the rest will be actively allocated.

4. Funds investing in OTC markets are generally active funds if their names are not marked with special words; Most of the funds traded on the floor are passive funds.

There is no difference between active funds and passive funds. Investors who like active funds think that they take the initiative to choose stocks and the overall income is higher. Investors who prefer passive investors think their operations are transparent.