What is the difference between LOF and ETF?

. LOF fund, that is, exchange-traded fund, is an open-end fund, which can be listed and traded on the exchange or traded on the exchange.

Fund raising is divided into two parts: on-site and off-site. There is no difference between off-site raising and ordinary open-end fund raising. Investors can subscribe through fund managers or fund agencies such as banks and securities companies. To raise fund shares on the exchange floor, investors can subscribe for fund shares online through the securities business department of a securities company with the qualification of fund consignment business on the trading day of Shenzhen Stock Exchange, but they cannot withdraw their orders, but they can declare them several times. The subscription share of each declaration must be an integer multiple of 65,438+0,000 or 65,438+0,000, and shall not exceed 99,999,000.

LOF stock subscription and redemption: The closing period is generally not more than 3 months, and the opening day should be the normal trading day of the stock exchange. After the purchase and redemption in the open market, you can declare the purchase and redemption through the securities business department of a securities company with the qualification of fund consignment business. Subscription is declared by the amount, and the reporting unit is one yuan; Fund share redemption based on share declaration and reporting unit. The declared amount of subscription and redemption shall be limited in accordance with the provisions of the prospectus of the declared fund. The subscription and redemption prices shall be based on the net value of fund shares calculated after the closing of the market on the day when the application is accepted.

Benchmark calculation. Off-exchange subscription and redemption are the same as other open-end funds.

LOF fund listing transaction: the opening reference price of the fund on the first day of listing is the net value of the fund share on the trading day before the first day of listing. After the fund is listed, investors can buy and sell fund shares online after opening an account in a securities company during trading hours, and the transaction will be conducted at the matching price of the trading system. The specific requirements are as follows: 1. LOF purchase declared quantity should be 100 or its integer multiple, and the minimum change unit of declared price is 0. 00 1 yuan. 2. The Exchange imposes price fluctuation restrictions on LOF transactions, with the fluctuation ratio of 65,438+00%, which will be implemented from the first day of listing. 3. After the investor sells the fund shares on T day, the funds will arrive on T+ 1 day, and the redemption funds will be at least T+2.

ETF is the English abbreviation of "transactional open index fund", which is an open index fund listed and traded on the exchange. ETF funds are index funds, and each ETF tracks a specific index, which is the "target index" of ETF and the "upgraded version" of index funds.

ETF combines the operating characteristics of closed-end funds and open-end funds. Investors can buy and sell ETF shares in the secondary market of the exchange like closed-end funds, or purchase and redeem them in the primary market like open-end funds. Compared with index funds, the cost of ETF is average.

It is cheaper, the tracking index is better and the tracking error is smaller. Compared with general open-end funds, there are great differences in transaction costs, fund management methods and transaction methods. First of all, ETF subscription means that investors exchange a fixed number of ETF fund shares from fund management companies in kind (open-end funds use cash); Redemption is to exchange a fixed number of ETF fund shares from the fund management company for a basket of index stocks (not cash), and the fund assets are a basket of stock portfolios.

ETF can be subscribed in many ways, including online cash, offline cash and offline stocks.

ETF has a variety of trading methods, which can be purchased and redeemed in the primary market or traded in the secondary market, thus arbitrage between the primary and secondary markets can be carried out. Etfs are exactly the same as stocks. As long as investors have securities accounts, they can buy and sell ETFs in intraday trading at any time, and the trading price changes in real time according to the market price. As far as transaction costs are concerned. Traditional open-end funds need to pay about 1.0%- 1.5% management fee every year, which is much higher than ETF management fee (about 0.3%-0.5%). In addition, traditional open-end funds need to pay a handling fee of 1%- 1.5% at the time of subscription and about 0.5% at the time of redemption, while ETFs only need to pay a commission of up to 0.2% at the time of transaction, which is similar to open-end funds.

The transaction cost of funds is relatively cheap. ETF's on-site trading is exactly the same as that of stocks and closed-end funds, and fund shares are bought and sold among investors. Investors can use the existing Shanghai securities account or fund account for trading without opening any new account. ETF is the approximate value of the reference unit fund net value (IOPV) calculated by the exchange, so that investors can estimate whether the transaction price of ETF deviates from its intrinsic value. In addition to disclosing the SSE 50 Index every 15 seconds, the SSE will also disclose the expected net fund share (IOPV) of the SSE 50 Index ETF at the same time interval for investors' reference.

ETF, like stocks and closed-end funds, has 1 trading unit (i.e. "1 hand") among the 100 fund units in the stock exchange, so the relevant provisions on block trading can be applied. The fluctuation range of ETF is 10% like stocks and closed-end funds. In order to make the price of ETF fully reflect the change of the underlying index, the fluctuation unit of ETF is the same as that of closed-end fund, which is 1%. In this way, every time the SSE 50 Index goes up (down) 1 point, the net value of ETF fund share per unit will go up (down) by 0.005438+0 yuan (1 pct).

What is the "physical purchase and redemption" of ETF? ETF fund managers will publish a list of "physical purchase and redemption" (also known as "a basket of stock files") according to the net asset value, portfolio and constituent stocks of the underlying index before the market opens every day. According to the contents of the list, investors can deliver the constituent shares to the fund manager of the ETF to obtain the "real subscription base" or an ETF with an integral multiple thereof; The above process will create new ETFs and increase the circulation of ETFs, which is called physical subscription. Redemption in kind is the opposite procedure, which reduces the circulation of ETF, that is, the process of investors converting the ETF of "real subscription base" or its integer multiple into the constituent stocks of the real subscription list. The physical subscription and redemption of ETF can only be delivered in kind, and only in some cases (such as when some constituent stocks cannot be directly purchased from the secondary market due to suspension of trading and other reasons). ), some constituent stocks can be conditionally allowed to use cash instead.

What is the "minimum purchase and redemption unit"? The basic unit of ETF physical subscription and redemption is called "minimum subscription and redemption unit" or "physical subscription base". The "minimum purchase and redemption unit" of each ETF may be different. Take the first ETF of SSE 50 Index as an example, its "minimum purchase and redemption unit" is one million fund shares. Due to the large amount of the "minimum purchase and redemption unit", under normal circumstances, only institutional investors and individual investors with large assets can participate in the "physical purchase and redemption" of ETF.

Like the general open-end fund, the net fund share of ETF refers to the value of the securities portfolio (including the cash part) represented by each ETF, that is, the total fund share divided by the net fund asset value.

In terms of fund management methods. ETF management belongs to "passive management". ETF managers will not take the initiative to choose stocks. The constituent stocks of the index are ETF stock selection, and ETF operation is to track the index. A successful ETF can be exactly the same as the underlying index as far as possible, that is, it can "copy" the index and let investors earn the return rate of the index with peace of mind. Most of the traditional management methods of stock funds belong to "active management".

The difference between ETF and closed-end fund is that when ETF has a discount or premium, arbitrageurs will eliminate the price difference through the mechanism of "physical purchase and redemption". This unique internal mechanism can compress the discount (overflow) price space of ETF in a very small range.

Since the minimum purchase and redemption unit of ETF in the primary market is 6,543.8+0,000 fund shares, while the trading unit in the secondary market is only 6,543.8+0,000 fund shares, ordinary investors cannot buy in the primary market.

ETF linked fund

Since ETF funds are generally purchased through securities companies, some fund companies have developed ETF linked funds in order to broaden the sales channels of ETFs. The ways and channels of subscription, subscription and redemption are exactly the same as those of ordinary open-end funds. Ordinary retail investors can buy ETF-linked funds, starting at 1 000 yuan.

Three advantages of ETF

(1)ETF adopts an indexed investment strategy. The deviation between ETF and the underlying index is small, and the investment in ETF can obtain similar income to the underlying index; Investors can invest in the underlying index at a lower cost, making investment as simple as investing in a stock.

(2) ETFs can be listed and traded. Like stocks, ETFs keep trading during trading hours, and investors can buy and sell according to the real-time trading price, so as to better grasp the trading price.

(3)ETF has low cost. ETF greatly saves operating expenses, such as research expenses and transaction expenses, by replicating index and physical redemption mechanism. ETF management fees and custody fees are not only far lower than those of actively managed stock funds, but also lower than those of traditional index funds that track the same index. The transaction cost of ETF secondary market is similar to that of stocks, which greatly reduces the transaction cost of investors. ETF is a brand-new investment tool. In the field of investment, ETF

It is no longer just an investment product, but an increasingly instrumental product. Investors can invest in ETF for stock reinvestment, asset allocation, long-term investment, arbitrage trading, timing and short-term investment.

Differences and relations between LOF and ETF

Listed open-end fund (lof) and exchange traded fund (etf) are easily confused concepts. Because they all have the characteristics that open-end funds can be purchased, redeemed and their shares can be listed and traded. In fact, there is an essential difference between the two.

ETF refers to a fund that can be traded on an exchange. ETF usually adopts a completely passive management mode, aiming at fitting an index. It provides investors with two trading methods: exchange trading, subscription and redemption: but in subscription and redemption, ETF exchanges fund shares and "a basket" of stocks with investors.

Characteristics of ETF: the threshold for purchasing ETF in the primary market is higher. The primary market should buy at least 1 10,000 ETFs. If the current net value is calculated, it will cost at least 800,000 yuan. I bought a basket of stocks instead of cash. If it is to redeem fund shares, investors will finally get a basket of stocks, and at least 6,543,800+000 shares will be redeemed. That is to say, if you participate in ETF investment in the form of subscription and redemption, it is actually impossible for ordinary retail investors to buy and sell in the secondary market like closed-end funds and stocks (the minimum investment share is only 100).