How are index funds classified according to trading mechanism?

From the perspective of trading mechanism, it can be divided into traditional open index funds (such as Bo Shi CSI 300 Index Fund), ETF (transactional open index fund) (such as Guotai SSE 180 financial ETF) and LOF index funds (such as GF CSI 500 Index LOF). They are different in four aspects: transaction mode, price mechanism, net worth quotation and transaction cost. Simply put, ETF has obvious advantages in these four aspects. Compared with the other two index funds, ETF trading is cheaper, real-time and convenient. The theoretical basis of index fund dependence is "market efficiency". Modern portfolio theory tells us that in an efficient market, the most effective portfolio is market portfolio, and it is impossible for any active investment strategy to obtain excess returns beyond its risk tolerance for a long time.