The full name of ETF fund is called transactional open index fund, also known as exchange traded fund. Referred to as ETF, it is a fund listed and traded on the exchange. Variable share open-end fund combines the operating characteristics of closed-end fund and open-end fund, allowing investors to buy or redeem fund shares from management companies and buy and sell ETF shares in the secondary market, which has the characteristics of subscription, redemption, listing and trading. The vast majority of ETF funds are index funds. ETF index funds represent the ownership purchase of a basket of stocks, and all of them are redeemed. To buy an iron axe, you need to buy stocks, buy iron pot, redeem iron pot and get back a basket of stocks. This method is not suitable for ordinary investment, but it is very friendly to institutional investors. In addition, ETF fund tracking index is also very accurate, and the error is very small. And judging whether the index fund is excellent depends on whether the index is tracked accurately and whether the error is small. ETF funds can be said to be the king of index funds, and ETF funds can obtain basically the same income as the index. In fact, for us ordinary people, a gifted fund basically has no subscription and redemption, not only because the process of subscription and redemption is complicated, but also because the funds needed for subscription and redemption are very large, and the minimum requirement for redemption is 5.0 1 100 million, and it must reach a certain scale. This is a matter for institutional investors. We just need to know about it, so we won't say much.
In addition, ETFs are more transparent. Because of the subscription and redemption mechanism, ETF will not have too much discount premium, no arbitrage space, and is relatively friendly to ordinary investors. (The higher the lightness, the less likely it is to be faked. ) ETF is listed on the exchange, and it can be traded countless times at any time in a day, because ETF is a basket of stocks, which is convenient for managers to operate and improve the efficiency of capital utilization. Because open-end funds often need to keep some cash to deal with the subscription, the tax and opportunities generated by redemption will be borne by investors.
One of the advantages of ETF is its low transaction cost, and indexed investment has the characteristics of low management fee and low transaction cost. Compared with other funds, index fund investment is not suitable for the purpose of outperforming the index, and it does not require too much cost, and the cost is very low compared with other funds. Our usual trading fund rates mainly include three management fees, custody fees (there will be sales service fees for games), subscription fees and redemption fees. Stock fund management fee 1.5%/ year, custody fee 0.2-0.6% (sales service fee 0.25%), namely 1.25-2%/ year. However, the ordinary piglet fund management fee is 0.75-0.5%/ year, the custody fee is 0.25%/ year (sales service fee is 0.2%), and the total ETF management fee is1%,0. 15% to 0.5%, and the custody fee is 0.05%. The total is about 0.5%. If the fund performance is the same, then it can be clearly seen that ETF funds make more money, with the transaction fee of 1.5% for stock funds and 1% for index funds. The conversion of these platforms into Alipay also requires 0. 15 and 0. 1%. I won't talk much about redemption here, because it is Class A, but short-term holding still requires a certain handling fee. The transaction fee of etf can be as low as 1/10000, that is, it only takes one yuan to buy a fund of 10,000 yuan, which can be said that it is not too cheap.
Advantage 2 of ETF. Because there is no need for funds to deal with the problem of subscription and redemption, ETF funds have high positions and more efficient use of funds. Although this is the advantage of ETF funds, the advantages are also disadvantages, and the ups and downs are also fierce. But for institutional investors, ETF is still a market hedging tool, because institutional investors have huge funds, institutional investors have stocks, and stocks can't be sold when the stock market is bad, so they can buy the constituent stocks of the corresponding ETF, then apply for ETF funds and finally sell them in the market. In this way, the ETF can be sold through securities lending to do reverse operation and reduce losses. Compared with ordinary funds, our opponents are fund companies, while ETF opponents are investors, and our players have changed. Generally speaking, ETF funds have the following advantages: it is convenient for fund managers to manage and facilitate the operation of institutional investment. For us ordinary people, we can buy and sell at will in the stock market and trading hours, and the transaction cost is low and transparent, so we don't have to worry about the behavior of rat warehouses. However, due to the surge in ETF fund positions, this is also one of the shortcomings. It's called Changxi, but it's also a combination of boxing and boxing, which is really distressing.
Having said some advantages of ETF funds, there must be disadvantages if there are advantages. Mainly the following shortcomings, it is convenient for investors to trade, but it cannot satisfy all investors. Because regular wage earners go to work during stock market trading hours, they just miss it perfectly. They can't purchase and redeem at any time like ordinary funds, and they can't make fixed investment. They can only buy it manually. Although the advantages are so great, they still can't satisfy everyone. Trading is all about hands. Compared with ordinary off-site funds, the demand for funds may be greater. For example, if I want to buy a fund of 10 over the counter, I can apply directly. Then, I need to buy a minimum of 100 funds on site. Comparatively speaking, the demand for funds will be even greater. Low transaction cost is a good thing for ordinary investment. It is precisely because of the low transaction cost that it is easier to operate frequently, which leads to higher transaction cost and easier loss.
I believe everyone has a deeper understanding of ETF funds. I emphasize here that ETF plays a more important role! You said once, that is to distinguish investors. If a blogger recommends an index fund to you, but doesn't mention the corresponding ETF fund, then I think he is an unqualified investor, and the advantage of tracking the corresponding index ETF is greater than that of ordinary index funds. Here, let's talk about the three elements of fund making money, performance management fee and handling fee. I won't say much about the reason, I believe everyone has understood!
Your appreciation is my greatest encouragement, and your concern is my greatest support!