1, trading places is different.
Etf fund is a transactional open index 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 market prices like closed-end funds, that is, investors can trade funds on or off the market, while ordinary funds can only trade on or off the market.
2. The transaction costs are different.
When trading etf funds on the market, investors only need to pay the commission fee, not the transfer fees and stamp duty, while the OTC general fund needs to pay a certain subscription fee, redemption fee, custody fee, management fee and sales service fee, which are higher than those of etf funds traded on the market.
3. Different tracking errors
Because etf has two prices, one is the transaction price like stocks, and the other is the net value like ordinary funds. When there is a difference between the two prices, someone will carry out arbitrage trading, that is, earn the difference. Because more and more people earn the difference, they will eventually fill it up, so the tracking error of etf is better than that of ordinary funds.
4. Different positions
Etf funds can reach 100% Man Cang, while ordinary funds can only reach 95%. As an open-end fund, the total share of general funds is not fixed, and the number of purchases and redemptions is also uncertain. When the redemption exceeds the subscription, the fund needs to keep 5% of the money to deal with the net redemption, which means that the investment position of the general fund cannot reach 100%.
At the same time, investors can use the OTC spread to arbitrage, that is, when the etf price on the spot is less than the net value, that is, when the fund is discounted, retail investors can buy etf fund shares at a low price in the secondary market, then redeem the shares in the primary market at the net value, and then sell the shares in the secondary market to complete arbitrage; When the etf price in the market is greater than the net value, that is, the fund premium, retail investors can buy a basket of stocks from the secondary market, then convert them into etf fund shares according to the net value in the primary market, and then sell ETFs at high prices in the secondary market to complete arbitrage.