The difference between ETF and general index fund

Differences between ETF and index funds:

1. Different trading methods

Traditional index funds are generally purchased on third-party software, such as Tiantian Fund Network and Egg Roll Network. ETF funds are generally purchased through the secondary market in the market, that is, they can be purchased directly through stock software, which is also the channel for our general retail transactions;

Secondly, investors can also purchase or redeem fund shares from fund management companies, but this method is generally adopted by institutions and local tyrants, because the threshold for purchase and redemption is very high, and it generally needs 5, yuan to start.

2. The intraday valuation methods are different

The intraday valuation of traditional index funds is the fund net value estimated by some fund websites according to the fund position ratio and the fluctuation range of Shanghai and Shenzhen stock markets on that day, while the purchase and redemption prices are based on the fund net value after accounting and proofreading by fund companies and custodian banks at night.

the trading time of p>ETF funds is different on the trading day, and the quotation is refreshed every 15 seconds, and the transaction is made at the real-time price, with a minimum unit of 1 lot. Note that at present, ETFs on domestic A-shares are still T+1 transactions.

3. Different fees and management fees

The fees and management fees of p>ETF funds are slightly lower than those of traditional index funds. ETF fund fees include: commission+management fee. Commission, like buying and selling stocks, is a few ten thousandths, and stamp duty is exempted. In terms of management fees, ETF funds are also lower than index funds.

4. Different dividend methods

Traditional index funds have two dividend methods: cash dividend and dividend reinvestment. The only way to pay dividends in ETF fund is cash dividend.