ETF index fund is an open-end fund with variable fund share, which is listed and traded on the exchange and tracks an index. Individual investors can buy directly as long as they have a stock account, and do not need to open an account in a fund company, so the transaction cost is low. They don't need to pay stamp duty like stocks, and they don't need to pay subscription fees and redemption fees to fund companies. It is a low-cost passive investment fund.

Different from actively managed funds, index funds are passive investments, tracking some indexes, such as SSE 50 and CSI 300. For retail investors, investing in index funds is better than investing in actively managed index funds.

According to different investment methods, ETFs can be divided into index funds and actively managed funds. Most foreign ETFs are index funds. At present, ETFs launched in China are also index funds. ETF index fund represents the ownership of a basket of stocks, which refers to the index fund that is traded on the stock exchange like stocks, and its trading price and fund share net value trend are basically consistent with the tracked index. Therefore, investors buying and selling an ETF is equivalent to buying and selling the index it tracks, and can get basically the same income as the index. Usually, it adopts a completely passive management mode, aiming at fitting an index, which has the characteristics of both stocks and index funds.