Most ETFs are designed to closely follow the performance of related indexes as much as possible. Take the first ETF TraHK listed in Hong Kong as an example. It is designed to keep up with the performance of the Hang Seng Index.

ETF can achieve this effect through "complete replication strategy" or "representative sampling strategy".

ETFs that adopt the "complete replication strategy" will invest in the constituent stocks of the index roughly in proportion to the relevant index. Therefore, the performance of ETF will closely follow the performance of index. In China Mainland and Hongkong, TraHK has also adopted a "comprehensive replication strategy" to closely track the performance of the Hang Seng Index, holding its constituent stocks roughly according to their proportion in the Hang Seng Index.

ETFs that adopt the "representative sample replication strategy" will invest in some stocks with similar characteristics (such as market value, industry share and liquidity) to relevant indexes. ETFs with this strategy often have higher tracking error risk than ETFs with "full replication strategy".

The market price of ETF fund units is roughly based on the net asset value of ETF units. However, because ETF units are traded on the exchange, their market prices may deviate from their net asset value due to the influence of market supply and demand. However, due to the participation and redemption mechanism of ETF, under normal circumstances, the degree of deviation should not be too great.

The two funds are of the same nature, and their prices are easily affected by market supply and demand. Pay attention.

Last Friday, the trading volume of 2,838 Hang Seng Xinhua FTSE 25 HS FXI C25 ETF was only 700 shares, while the trading volume of 2,800 TraHK funds was 65,438+0,788,000 shares. If you rush to cash in 2838 in the future, it may be difficult to get the goods. It is recommended to buy TraHK.

What are the risks of investing in Hang Seng ETF?

Before deciding whether to invest in Hang Seng ETF, we should consider whether it is suitable for us to invest in Hang Seng ETF from personal situation, financial situation, investment objectives, investment experience and risk tolerance. You should also note that the unit price of "Hang Seng ETF" and the income it brings can go up or down, so you have the opportunity to invest in "Hang Seng ETF" and suffer the principal loss. In addition, you should avoid over-investment in any single type of investment (in proportion to your overall portfolio), including any "Hang Seng Index ETF" investment, so as to avoid over-exposure of your portfolio to any specific investment risks. You should carefully read the sales documents of Hang Seng ETF in China and Hongkong, and consider all the risks involved. Generally speaking, these risks include but are not limited to:

Image reference: Hang Seng/h * * */chi/per/invs/image2/bluedot.

The index tracked by "Hang Seng ETF" focuses on the securities of a specific industry or a group of industries to a certain extent, and the investment of this ETF will be concentrated in the same way. The performance of Hang Seng ETF is greatly influenced by the performance of the industry or a sub-industry.

Image reference: Hang Seng/h * * */chi/per/invs/image2/bluedot.

Similar to other index tracking funds, Hang Seng ETF is a passively managed fund. Fund managers have no discretion to choose stocks one by one or take defensive measures when the stock market falls. Any decline in the relevant index will lead to a corresponding decline in the price of Hang Seng ETF.

Image reference: Hang Seng/h * * */chi/per/invs/image2/bluedot.

There is no guarantee that the performance of Hang Seng ETF will be consistent with the relevant index.

Image reference: Hang Seng/h * * */chi/per/invs/image2/bluedot.

Although every fund unit of Hang Seng ETF is listed on the Stock Exchange, there is no guarantee that these fund units will keep trading smoothly.

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The market price of "Hang Seng ETF" fund unit will be affected by the market supply and demand of the exchange, the liquidity of the fund unit and the bid-ask spread, and it will be higher or lower than the net asset value of each fund unit. The market price of "Hang Seng ETF" fund unit will also continue to fluctuate during the trading day.

Image reference: Hang Seng/h * * */chi/per/invs/image2/bluedot.

Although every fund unit of Hang Seng ETF is listed on the Stock Exchange, it may be delisted by the Stock Exchange. In this case, after consulting the trustee, the fund manager can seek the prior approval of the relevant regulatory authorities to operate the "Hang Seng ETF" as a traditional open index fund, and will issue a notice to investors. Or in this case, if the trustee thinks it is in the best interests of investors, the fund manager can liquidate the relevant "Hang Seng ETF" and will notify the investors. Since the fund manager wants to sell all the investments related to Hang Seng ETF, investors can recover the net asset value of each fund unit on the liquidation day, which may be higher or lower than the fund unit price paid by investors at the time of initial investment.

As far as Hang Seng H-share ETF and Hang Seng FXI25 ETF are concerned, when tracking the relevant indexes, these two ETFs will invest in the constituent stocks of the relevant indexes with reference to the proportion of the constituent stocks of the relevant indexes in the relevant indexes, and some of the constituent stocks of the relevant indexes are stocks of mainland companies in China, and their businesses have great investment and development potential in China. Therefore, these investors of Hang Seng ETF will have to bear the general risks of investing in emerging markets, especially all the special risks related to investing in China market.

Supplementary explanation:

* * * * * (Correction) 2838 Hang Seng Xinhua FTSE 25 HS FXC25 ETF only traded 7000 shares (to 0 Rock) last Friday. Reference: B's opinion,