Funds can be divided into on-site funds and off-site funds. Among them, on-site funds refer to funds traded in the stock market, and off-site funds refer to funds that can be traded on third-party consignment platforms such as fund companies, banks and Alipay. So, is it better to buy an OTC fund or an OTC fund? Which is more cost-effective? Below we have prepared relevant contents for your reference.

Buying OTC funds is better and more cost-effective than buying OTC funds for the following reasons:

1, the on-site fund fee is lower.

Investors only charge commissions to on-site funds, of which the highest commission rate is not more than three thousandths, which varies from securities company to securities company and is generally two thousandths. However, OTC funds need to pay certain subscription fees, redemption fees, sales service fees, management fees and custody fees, which are higher than those of OTC funds.

2. Funds arrive faster.

When OTC funds are sold, their funds are deposited in the stock account on the same day, which can be used to purchase other funds or wealth management products, and taken out on the next trading day. When the OTC fund is sold, its funds will not arrive on the same day and need to be delayed. Different types of funds arrive at different times, and relatively speaking, off-site funds arrive faster.

3. The transaction is more flexible

Some OTC funds implement T+0 trading mode, that is, investors can buy on the same day and sell on the same day. Compared with OTC funds, their transactions are more flexible.

Of course, investors can also take advantage of the spread between on-site and off-site funds to carry out arbitrage, that is, when the etf price in the market is less than the net value, 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, investors can buy a basket of stocks from the secondary market, then convert them into etf fund shares in the primary market according to the net value, and then sell ETFs at high prices in the secondary market to complete arbitrage.