During the continuous decline of the stock market this week, many ordinary investors were tortured to death and simply pretended to be dead. However, the more funds fell, the more they borrowed equity ETF products, and the crazy bargain-hunting, broad-based index and hot industry index were all sought after by funds: CSI 500ETF, CSI 300ETF, Kechuang 50ETF and chip ETF were bought by funds against the market. Among them, CSI 500ETF, as a broad-based fund, ranks first in the net subscription of equity ETFs. From the capital flow of more than ten trading days since the Spring Festival, ETFs in the chip, photovoltaic, medical, food and beverage, non-ferrous metals and other industries that have been greatly adjusted have also received a net inflow of 1 100 million.

Buffett advised his wife: After I die, I will buy an ETF. So what exactly is an ETF? Its full English name is exchange traded fund, and its Chinese translation is "exchange traded fund". In essence, it is an index fund that can be traded in the market like a stock. It can not only buy and sell ETFs freely in the secondary market like stocks, but also purchase and redeem ETFs in the primary market. According to the basic assets it tracks, ETFs are divided into mainstream stock ETFs, bond ETFs, commodity ETFs and currency ETFs, cross-border ETFs, industry index ETFs and theme index ETFs.

What are the investment advantages of ETF funds recommended by Buffett?

(1) Reduce costs

The fee is low, and there is no stamp duty, subscription fee and redemption fee. The transaction fee for purchasing ETF funds from Shanghai Stock Exchange is not higher than 2.5‰ of the transaction amount and not lower than 0.085‰ of the starting point in 5 yuan.

If it is an ETF fund of Shenzhen Stock Exchange, the transaction fee shall not be higher than 2.5‰ of the transaction amount and not lower than 0. 1375‰.

(2) Flexible trading

The transaction efficiency is high and the arrival time is short, that is, ETF funds can be used on the same day and withdrawn the next day.

(3) spreading risks

ETF is equivalent to a basket of stocks, which avoids the phenomenon of "black swan" and "style drift" of individual stocks and solves the problem of stock selection in risk diversification. Taking the new energy sector as an example, the industrial chain ecology is more complex, involving many sub-sectors and enterprises. In the future, the performance of individual stock differentiation may become more and more serious, making it more difficult to invest in individual stocks. Investing in the big data industry through ETFs can spread risks.

(4) transparent operation

ETF tracks the underlying index and operates transparently, eliminating the dependence on Kunkun fund managers.

(5) Strong representativeness

Taking Huaxia CSI New Energy ETF as an example, the target index, CSI New Energy Index, selects the best among the best and locates the core assets of the new energy industry. The constituent stocks of CSI New Energy Index are highly representative of profitability.

Most ETFs are index funds. Buffett began to study index funds on 1993. In his letter to shareholders, he wrote: By investing in index funds regularly, an amateur investor who knows nothing can often beat most professional investors. In 2007, Buffett once again recommended that low-cost index mutual funds may be the best choice for most small and medium-sized investors who don't have time to do sufficient stock research.

(Risk warning: The opinions expressed in this article only represent personal opinions, and it is not recommended to involve the subject matter. So trading on this basis is at your own risk. )