ETF is a kind of index fund, which tracks a specific index. Investors buying and selling an ETF is equivalent to buying and selling the index it tracks. This small series has compiled a detailed interpretation of ETF funds for your reference.
Detailed explanation of ETF fund
Structure: ETF funds usually adopt the structure of open-end funds, that is, investors can buy and redeem fund shares at any time according to their own needs.
Fund size: ETF funds are relatively large, because they can be listed and traded on the exchange, attracting a large number of investors to participate.
Portfolio: ETF portfolio usually simulates a specific index, such as stock index, bond index, commodity index and so on. This means that the performance of ETF funds will be similar to the index tracked.
Market pricing: the price of ETF funds is determined according to the net asset value of the fund and the relationship between market supply and demand, usually close to or very close to the net asset value of the fund. This is different from the traditional fund pricing method.
Liquidity: ETF funds have high liquidity, because investors can buy and sell ETF funds at any time on the exchange, and the price immediately reflects market supply and demand.
Transaction cost: Trading ETF funds requires transaction commission, which is different from traditional open-end funds. However, due to the low management fees and sales service fees of ETF funds, the overall transaction costs are relatively low.
Why are investment funds good?
Diversification of risks: A fund's portfolio usually contains many different types of assets, and the risk of a single investment is reduced by diversifying risks.
Professional management: The Fund is managed and operated by a team of professional fund managers who have professional investment knowledge and experience and can provide professional investment management services for investors.
Flexibility: Funds usually have high liquidity, and investors can buy and sell fund shares at any time, providing more flexible investment options.
Diversified investment: fund investment usually involves a variety of asset classes, such as stocks, bonds, commodities, etc. , and can achieve a diversified portfolio.
Transparency: The Foundation publicly discloses its positions and investments, so that investors can clearly understand the asset allocation and risk status of the Fund.
What exactly is an ETF fund?
ETF fund is called Exchange-TradedFund, which is an open-end fund and traded through the stock exchange. Different from traditional open-end funds, ETF funds can be listed and traded on stock exchanges, similar to stock trading. Investors can buy and sell shares of ETF funds through the stock exchange without directly trading with fund companies. ETF funds usually track specific indexes, such as stock index, bond index or commodity index, and some ETF funds adopt active management strategy.
What are the common types of funds besides ETF funds?
Stock fund: mainly investing in the stock market, aiming at pursuing the capital appreciation of stock investment.
Bond fund: mainly invests in the bond market, aiming at pursuing fixed income and diversifying risks.
Hybrid fund: also known as balanced fund, it invests funds in various asset classes such as stocks and bonds, aiming at balancing risks and returns.
Money market funds: invest in short-term and low-risk financial instruments, such as short-term bonds and bank deposits, in order to pursue the liquidity and preserve and increase the value of funds.
QDII Fund: qualified domestic institutional investor Fund, through which investors can indirectly invest in overseas markets to gain opportunities for overseas asset allocation.
REITs fund: Real estate investment trust fund, which invests in real estate-related assets and aims to get returns from real estate rent and appreciation.
Trading rules of ETF funds
1. Purchase through securities account. ETF fund is an on-site fund, and investors need to use securities accounts for subscription. ETF funds, like stocks, have real-time price changes and can be traded directly in the market and bought and sold in real time.
2. Trading time. The trading hours of ETF funds are 9: 30am-11:30am and afternoon13: 00pm-15: 00pm every trading day, which is closed on weekends and legal holidays.
3.T+ 1 transaction. ETF funds buy on the same day and need to wait for the next trading day to sell. After the investor sells the ETF fund, the funds will be received immediately, and the funds can be withdrawn to the bank card the next trading day.
4. Price first, time first. For the submitted ETF fund orders, the highest price will be traded first under the same submission time; In the case of the same submission price, the transaction is made first.
5. The trading starting point is 100 shares. The minimum buying units of ETF funds are 1 lot and 100 lot, and each purchase must be an integer multiple of 100 shares. The minimum change unit of ETF price declaration is 0.00 1 yuan.
6. Price limit. ETF funds rise and fall from the first day of listing. Growth enterprise market ETF, Chuang50ETF, science and technology innovation board ETF, Chuang50ETF and Shuangchuang 50ETF are limited to 20%, and other ETF funds are limited to 10%.
7. Purchase and redemption. ETF funds generally use funds to trade directly in the market, but investors can also trade through subscription and redemption. The minimum purchase and redemption unit is generally 500,000 copies or 6,543.8+0,000 copies, and share purchase and share redemption are adopted. Investors need to buy a basket of stocks corresponding to ETF fund constituent stocks, and what they get after redemption is also a basket of stocks.