Traditional Culture Encyclopedia - Traditional stories - What is the difference between an ETF fund and an index fund? Also, what is a money fund?
What is the difference between an ETF fund and an index fund? Also, what is a money fund?
ETF is an acronym for Exchange Traded Fund, which is also known as Exchange Traded Fund.
Fundamentally speaking, ETFs are also index funds, but the design of their trading method is different from that of traditional index funds. The shares of an ETF are embodied in a basket of stocks, which simply means that when you buy an ETF, you are indirectly purchasing a portfolio of corresponding stocks. This leads to a major difference between ETFs and traditional index funds, that is, the entire fund assets are actually 100% invested in stocks, while traditional index funds will set aside cash in case of investor redemptions, in which case the ETFs pen the traditional index fund ups and downs with close to the index itself.
Money funds, also known as money market funds, are funds that invest fund assets in money market instruments.
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