Compared with direct participation in iron ore futures investment, investing in Shanzheng iron ore ETF is more difficult, has lower threshold and lower risk, and is more suitable for individual investors.
First, iron ore futures contracts have an expiration date and need to be replaced in time, which is complicated to operate. However, ETF has no expiration date, so it doesn't need to move positions or open futures accounts. It's just an ordinary Hong Kong stock trading account. When trading, you only need to enter the 3047 code, which is no different from buying and selling stocks such as Tencent and Ali.
Second, futures have their own leverage, which is volatile and risky, and it is not suitable for ordinary investors to withdraw. However, Shanzheng iron ore has no leverage, and the fund actively deleverages through asset allocation, which greatly reduces the risk.
According to the investment strategy of Shanzheng Iron Ore ETF, the fund manager uses about 20% to 30% of the net asset value as a deposit to buy the iron ore futures contract of Dashang to track the futures price changes, and the rest of the assets are cash (US dollars) or money funds, and by the way, get fixed interest.
Third, as a passive fund product, Shanzheng iron ore has low transaction cost, which is also a major competitive advantage. Shanzheng Iron Ore passively tracks the iron ore futures price index of Dashang, trades the main iron ore contract with the largest position, and will change the contract one month to one and a half months before the contract expires, so as to reduce the risk of moving positions and the trading rules are transparent.