What are the types of ETFs? LOF species

Exchange-traded open-ended indices** are also commonly referred to as Exchange Traded Funds (ETFs)."etf"), is a kind of open-ended that is listed and traded on an exchange and has a variable share.

Transactional open-ended index is a special type of open-ended, which combines the operational characteristics of closed-end and open-ended, investors can not only subscribe or redeem shares from the management company, but also buy and sell ETF shares in the secondary market according to the market like closed-ended, however, the subscription and redemption must be exchanged for a basket of shares or a basket of shares. Due to the existence of both market trading and subscription and redemption mechanisms, investors can carry out arbitrage transactions when there is a price difference between the ETF market and the net value of the unit. The existence of the arbitrage mechanism allows ETFs to avoid the discount problem that is common in closed**.

According to different investment methods: ETFs can be divided into index** and actively managed**, and the vast majority of foreign ETFs are index**. At present, the ETFs launched in China are also indexes**.

ETF index represents a basket of ownership, which refers to an index that is traded on an exchange like an index, and its trading and net share value trends are basically the same as the index being tracked. Therefore, when an investor buys and sells an ETF, he or she buys and sells the index it tracks, and can obtain returns that are essentially the same as that of the index. It usually adopts a completely passive management method, with the goal of fitting a certain index, and has the characteristics of both ** and **.

LOF**, the full name in English is"listed open-ended fund", known in Chinese"Listed open**"。That is, after the end of the listed open-ended ** issuance, investors can not only subscribe for and redeem ** shares at designated outlets, but also buy and sell the ** on the exchange. However, if the investor subscribes for the ** share at the designated outlets and wants to sell it online, he must go through certain transfer custody procedures; Similarly, if you buy ** shares online on the exchange, and you want to redeem them at designated outlets, you must also go through certain transfer custody procedures.

LOFS (Listed Open-ended Funds) is a kind of open-ended funds that can be subscribed or redeemed in the OTC market at the same time, and organically linked the OTC market and the on-exchange market through the share transfer custody mechanism.

LOF refers to an open-ended investment that is issued, listed and traded on an exchange. The listing can be subscribed and centralized trading through the exchange, as well as subscribed, subscribed and redeemed by managers, banks and other distribution agencies. That is, on the basis of maintaining the current open-ended operation mode, increase the channels for exchange issuance and trading.

1. The places for subscription and redemption are different.

The subscription and redemption venues of ETF** and LOF** are different, although both ETF** and LOF** have the characteristics of both closed** and open-ended**. However, the subscription and redemption of ETFs** can only be carried out on exchanges, that is, they can only be traded on the exchange; LOF** can be carried out both on exchanges and at distribution outlets.

2. The subject matter of subscription and redemption is different.

In addition to the different places of subscription and redemption, ETF** and LOF** also have different subscription targets. Among them, the ETF adopts "in-kind subscription and in-kind redemption", and investors subscribe for a basket of **, and the redemption is also a basket**. LOF** may subscribe to a basket**, but the redemption is cash.

3. The transaction limit is different.

In terms of trading limits, there is also a big difference in ETF**lof**. Compared with LOF**, ETF** has a higher threshold, with a minimum trading requirement of more than 500,000 shares, and only investors with a large amount of funds can participate; LOF has no special requirements for subscription and redemption, and ordinary investors can also participate.

Extended material: How to invest with ETFs and LOFs.

For LOF, the investor's investment behavior can be relatively simple. If you are optimistic about the relevant open-ended**, for example, you are optimistic about a certain open-ended ** of a certain **company, then you can buy it as if you were buying a closed**, or you can buy it at the time of its issuance. Secondly, more aggressive investors can also carry out some ** operations.

Of course, this must be carried out on the premise of having sufficient confidence in the ** net value, because after all, LOF publishes the net value once a day.

For ETFs, investors should make some choices, such as choosing products and timing. First of all, choose the right ETF product for yourself. Judging from all aspects of information, there will be a series of exchange transactions in the future**, the Shanghai Stock Exchange said:

In the future, we will take the opportunity to launch a series of ETF products such as SSE 180 ETF, High Dividend Index ETF, Stock Index ETF, and Industry ETF. So, how investors can choose the right variety among many ETFs is a question worth considering. The author concludes, first, to understand, and second, to believe that its index will rise in the long run; Third, the index is suitable for your own investment style.

For example, risk-appetite investors are suitable for small-cap ETFs, while risk-averse investors are suitable for blue-chip ETFs. Second, choose the timing. Judging from foreign experience, it is best to intervene when the index adjusts to 20, and chasing high and buying ETFs will be the same as chasing high ****.

At present, the Shanghai Composite 50 Index has adjusted from the highest point to the recent lowest point (** price) and reached a maximum of 22, which is theoretically a buying opportunity. Of course, this is just an empirical choice; Conversely, if you believe that the SSE 50 Index is unlikely to rise in the future, and that its future returns may not be as good as the savings gains, then you should obviously not invest in the SSE 50 ETF.

That is, the trading index is open**, the ETF is an open-ended ** that tracks an index and can be listed on the exchange**, and the LOF** is listed to the open**.

It is a type pioneered in China, the subscription and redemption of ETF can only be carried out on the exchange, and can only be traded on the floor, and LOF can be carried out on the exchange or at the distribution outlets.

Using "in-kind subscription, in-kind redemption", the investor subscribes for a basket of **, and the redemption is also a basket **, and the LOF ** subscription may be a basket **, and the LOF redeems the actual cash.

The subscription and redemption venues are different: the subscription and redemption of ETFs** can only be carried out on the exchange, and can only be traded on the exchange; LOF**, on the other hand, can be traded on exchanges and outlets.

The target of subscription and redemption is different: ETF** physical subscription, physical redemption, what is subscribed, what is redeemed; The LOF** may subscribe for a basket**, but the redemption is cash.

Trading restrictions are different: the threshold for ETF trading is relatively high, with the minimum trading threshold being 500,000 shares; LOF** has no special requirements for subscription and redemption, and ordinary investors can also participate.

The frequency of NAV** is different: in the secondary market, ETF** is offered every 15 seconds****; LOF**once a day or several times a day**.

ETF is an abbreviation for Exchange Traded Fund, often translated as "Exchange Traded**"."On the one hand, it can be bought and sold in the secondary market of the exchange like a closed one, and on the other hand, it can be purchased and redeemed like an open-ended**, but its subscription is to exchange a basket of ETF shares, and it is also a basket of redemptions when redeeming** And not cash.

LOF (Listed Open-ended Fund)** refers to an open-ended fund issued and listed through the Shenzhen Stock Exchange trading system. The biggest difference between LOF and other shares is that investors can choose to subscribe and redeem at banks and other distribution agencies according to the net value of the shares at the close of the day, or they can choose to buy and sell at the combined price of the business departments of each member of the Shenzhen Stock Exchange, which is simply a kind of cross-market. We can take advantage of this feature for cross-market arbitrage.

In the current adjustment, there will often be big ups and downs, and the fluctuations are quite large. Especially in the event of a sharp fall, due to the fact that the LOF** sell-off is greater than the buying order in the exchange market, the LOF** will be significantly larger, and its ** will be much greater than the decline in its net value. Therefore, investors can completely go to the exchange market on T day with a high discount rate of LOF, and then go to the company to go through the custody procedures (the custody fee is about 30 yuan), and investors can redeem LOF at the net value of the company on T+1 day.

As long as the net value of LOF** on T+1 day is higher than the ** price of the exchange market on T day after deducting the handling fee, investors can achieve arbitrage, and the larger the difference, the more profits.

In the case of a premium for LOF**, investors can also sell LOF** on the exchange market on T+1 after the company transfers custody with the net value of LOF** to complete the arbitrage.

There are piles of theories in the book, and the rules are superfluous.

When actually trading, there is no difference, winning or losing is the same, and what you see prevails.

The shareholder account is displayed at the time of purchase and can be bought. Not shown, not bought.

It doesn't matter if it's on and off the counter, cash**, financial strength those.

ETFs and LOF are both listed**, but ETFs track an index and mimic a combination of indices.

ETF and LOF both belong to the common market**, both have their own characteristics, if you are trading on the market, the two are easy to be confused, what are the specific differences between ETF and LOF?

The difference between an ETF and an LOF

Differences in nature

The Chinese name of ETF is trading open-ended index**, and LOF is listed open-ended**.

The difference between the subject matter of investment and investment

The ETF adopts a passively managed strategy, tracking the index, which is an index**, and the investment target of the LOF can be an index or other actively managed strategies**.

The difference in liquidity

The liquidity of ETFs is generally very strong, while the liquidity of LOF is related to the degree of trading activity, which may be relatively liquid or weak.

The difference between redemption methods

ETFs can subscribe and redeem shares from the management company, but they must be exchanged in a basket, and if they are traded on the exchange, they will be exchanged for shares in cash, while LOF only needs to be exchanged for shares through cash.

The difference from ordinary open**

Compared with ordinary open-ended**, ETFs fully replicate the index, adopt a passive tracking strategy, and trade on the floor, while LOF only adds an on-exchange trading method compared with ordinary open-ended**.

What ETFs and LOFs have in common

ETF and LOF trading methods and settlement methods are the same, ETF and LOF have both on-exchange and over-the-counter trading methods, and at the same time, there are two ways of net value trading and ** trading.

There are arbitrage opportunities, in the market, ETF and LOF are traded with real-time changes in **, and there is only one updated net value per day outside the market, if there is a discrepancy between the ** and the updated net value at the time of **, there will be a discount and premium, and the emergence of the discount premium can provide arbitrage opportunities.

1. ETF refers to an exchange-traded open-ended index**, commonly known as exchange-traded **, which is an open-ended index that is listed on an exchange and has a variable share. Combining the characteristics of closed-end and open-ended, investors can buy and sell ETF shares in the secondary market, or subscribe to redeem ETF shares from the ** management company. However, the subscription and redemption must be exchanged for **shares, or **shares for a package**.

2. LOF refers to the listed open-ended, which is an open-ended that can not only subscribe and redeem shares in the over-the-counter market, but also can be purchased, subscribed or redeemed on the exchange. Sell or redeem LOF and get cash; If you buy or subscribe to LOF, you can directly trade with cash and directly get a share of LOF.