differences between ETFs and general open-end funds: 1. trading places is different: generally, open-end funds need to go to banks or online banks to purchase or redeem, while ETFs are conducted directly by the trading software of securities companies on the computer after the securities companies have opened their accounts. In industry jargon, the former is called the primary market (similar to the transaction between stores and customers), while the latter is called the secondary market (similar to the transaction between customers). It should be noted that most securities companies' software actually covers the subscription and redemption function of the primary market of open-end funds, so even if the general open-end funds are operated, there is no need to go to the bank at all. The trading software of any larger securities company can subscribe for more types of open-end funds than any bank. Using market trading software, you can operate stocks, bonds, warrants, closed-end funds, ETFs, etc. by buying and selling (generally called stock trading module), and you can operate general open-end funds by purchasing and redeeming (generally called fund trading module). Note: the operation of ETF funds is in the stock trading module. 2. Different trading methods: the operation of open-end funds is called subscription and redemption. The subscription is generally to buy a certain number of funds with an integer multiple of 1 yuan, and after deducting the subscription fee, it is generally xxxx.xx. When buying and selling ETFs, they usually buy 1 integer shares, or an integer lot (1 lot =1 shares), and they need to pay xxxx.xx yuan including the handling fee. It should be noted that ETF can also be purchased and redeemed in the primary market like open-end funds, but it is completely unnecessary to do so, and it is not as cost-effective as the secondary market in terms of time and rate. Moreover, the system allows the funds in the two markets to be convertible to each other, which may even lead to arbitrage opportunities. However, due to the relationship between time and cost, arbitrage often becomes a loss, so almost no one switches like this. However, the design of this system greatly reduces the discount rate of on-site prices, which is a great benefit, which will be analyzed in detail later. 3. Different transaction rates: Generally, open-end funds have to pay a subscription fee of 1.2%, a redemption fee of .5% and a redemption fee of 2%. According to the transaction rate of general securities companies, the buying fee of ETF is the same as that of closed-end funds, which is generally only three thousandths, and the selling fee is also three thousandths, and the lowest is 5 yuan every time. The buying and selling fees of Guotai Junan Securities where I am located are only 2.5% respectively, so the total amount of buying and selling is only .5%. In this way, from the point of view of handling fee, it saves 75% greatly, and has low transaction cost, which can greatly facilitate band operation. 4. Different turnaround time: Generally, open-end funds can only see the share after two working days of subscription, that is, T+2, and it takes T+5 working days for redemption before the funds will return to the books. And ETF, buying and selling are all T+1 transactions, that is, after buying, according to the intraday price at that time, you can immediately know how much money you spent, and the intraday price changes can be reflected in your account, and you can sell it on the next trading day. After selling, the money will return to the book immediately. If you want to take out the money, you need to wait another day, but if you want to buy another investment product, you can operate immediately. Therefore, in fact, ETF can sometimes be understood as T+. 5. Different fund shares: Because open-end funds are purchased and redeemed every day, the total number of fund shares is changing every day. ETFs only toss and turn between investors, so the total share of ETF funds in the secondary market is the same as that of closed-end funds, and they are relatively unchanged. The share of ETF in the primary market, like open-end funds, changes every day. As mentioned earlier, although funds in the two markets are allowed to carry out conversion arbitrage, almost no one does so. 6. Different price sources: Open-end funds are all real prices, and a real price can be calculated according to the rise and fall of the market value of the stocks held on that day and the total share of the funds on that day. This price can only be found through various websites at around 9: every night, which makes people very upset. And ETFs have two prices, one is the same real price as open-end funds, and the other is determined by intraday fluctuations in the secondary market, so that intraday prices fluctuate all the time, and a closing price will be generated at 3 pm every day. The daily closing price is driven by the basic people in the secondary market according to the rise and fall of the market on that day, so it will fluctuate around the real price (the real price in the primary market on that day will not be found until around 9 pm). Most of the time, the closing price in the bull market will be lower than the real value, forming a discount. In a few cases, the closing price will be higher than the real value, forming a premium. And if there is always a premium for a period of time, it means that people are crazy to buy, so the bull market has reached its climax and may fall at any time. The advantages of ETF are analyzed as follows: 1. Rate advantage: Referring to the paragraph "Different transaction rates" above, the 2% rate of subscription and redemption of general open-end funds has greatly squeezed the profits of the people, and at the same time greatly increased the cost of band operation. The ultra-low rate of ETF totaling .5% greatly facilitates the band operation. 2. Time advantage: The efficient liquidity of ETF makes it possible to escape from the top of the day and then bargain at any time. Open-end funds will never be able to do this, and the funds will arrive five working days after redemption. At that time, it is estimated that they will rebound very high. Therefore, when everyone understands the advantages of ETF, there is no need to apply for open-end funds, just as the old citizens rarely buy low-priced funds. 3. Easy to escape: This is relative to stocks. ETF rarely goes up and down, especially the down limit hardly appears, because there are generally dozens of stocks held by funds, and it is impossible for all of them to go down. Moreover, funds generally do not have Man Cang stocks, and there is always a certain amount of cash, so there will be no down limit. Therefore, when the market is bad, when other people's stocks can't be sold because of the continuous daily limit, our ETF can swagger out easily at any time. 4. The discount rate is very small: this is the biggest difference between ETF and closed-end funds. Closed-end funds actually have two prices, but closed-end funds only trade in the secondary market, so there is only one price objectively, and the intraday trading price is generally much lower than the real value, and the discount rate is often kept at around 3%, that is, the real price is 1.3 yuan, and the closed-end fund price in the market is generally 1 yuan. This high discount rate will last until the closed-end fund expires. The trading mechanism designed by ETF, which can be switched between the two markets, greatly ensures that the discount rate will never be very large. Therefore, the daily fluctuation range of ETF is naturally smaller than that of closed-end funds, so even if closed-end funds have a daily limit, ETFs generally will not.

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