1. ETF funds and LOF funds mentioned here are open-end funds, so investors of these two types of funds can purchase or redeem funds from fund companies at any time. By the way, they are also trading funds (that is, funds that can be bought and sold in stock accounts)
2. The difference lies in the way they buy and redeem. ETF fund means that investors buy ETF fund shares with a "basket" of stocks and redeem a "basket" of stocks; LOF funds, whether purchased or redeemed, must be converted into cash.
3. Due to the different subscription and redemption methods, these two types of funds are different in subscription and redemption efficiency, fund positions and product transparency.
Extended data:
Open-end funds and closed-end funds are isomorphic, forming two basic modes of fund operation.
1. Open-end funds refer to investment funds whose scale is not fixed, but which can issue new shares or be redeemed by investors at any time according to market supply and demand. Closed-end fund is relative to open-end fund, which refers to the investment fund whose fund size has been determined before issuance and remains unchanged within the specified period after issuance.
2. Before 2004, open-end funds were not listed and traded on the stock exchange, but were generally purchased and redeemed through consignment agencies such as banks or direct selling centers. After 2004, China innovated the operation mode of open-end funds, allowing some open-end funds to be listed and traded on the stock exchange, and became a listed open-end fund (LOF).
3. The scale of the fund is not fixed, and the fund unit can sell it to investors at any time or buy it back at the request of investors; Without duration, it can theoretically exist forever; The price is determined by the net asset value. Closed-end funds have a fixed duration, and the fund scale is fixed during the duration. Generally, they are listed and traded on the stock exchange, and investors buy and sell fund shares through the secondary market.
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