ETF is called a revolutionary investment product. Since its birth, it has had a tremendous impact on the global fund industry at an unimaginable speed. So what exactly is an ETF?
ETF is the abbreviation of English exchange traded fund, which is translated into Chinese as "transactional open index fund", also known as "exchange traded fund". Funds that can be traded on the exchange and track specific indexes can be purchased and redeemed at any time.
If the ETF is represented by a formula, it is: ETF= trading index fund.
Next, we understand the connotation of ETF from three aspects: transaction, index and fund:
Trading: ETF is a trading fund, which can be bought and sold in the secondary market of the stock exchange. As a product traded on an exchange, ETF can be traded freely like a stock. ETF is often called "large-cap stock" or "index stock" because of its outstanding trading nature.
Index: ETF is an index fund that tracks the index of a specific security. In fact, ETF is an index investment tool. By copying the basic index to build portfolio securities that track the index changes, investors can trade a package of securities by buying and selling products.
Fund: ETF is an open-end fund, which can be purchased and redeemed in kind at any time. During the trading hours, investors can buy and redeem ETF shares in the form of portfolio securities at any time in the primary market.
To sum up, the fund managers of index funds invest in index stocks, and they build the portfolio of index funds by buying some or all of the stocks contained in an index. The purpose is to make the change trend of this portfolio consistent with the index, so as to achieve roughly the same rate of return as the index. For example, the Growth Enterprise Market 50ETF( 159949) tracks the top 50 stocks in the Growth Enterprise Market according to a certain proportion. GEM 50ETF copied this combination and ran close to it.
After analysis, the concept of ETF is very clear, and it is a special type of open-end fund. Investors can buy or redeem fund shares from fund companies with a basket of stocks, or buy and sell ETF shares in the secondary market at the market price.
2.2 development. Spot bitcoin exchange trading fund
In the 1970s, indexed investment rose in the United States. 1993, the United States launched the first ETF, namely the famous SPDR, and S&; AmpP 500 is used as the target index. Subsequently, successful ETF products such as QQ tracking Nasdaq 100 and EEM tracking MSCI Emerging Markets Index came into being. 1998, the first ETF TraHK in Asia was launched in Hongkong, China. After 20 years of development, at present, in the United States, the trading volume of ETF accounts for 30% of the trading volume in the market, and 2 out of every 100 Americans hold ETF or indirectly; In China Mainland and Hong Kong, there are more than 2 million investors holding ETFs, while the total population of China Mainland and Hong Kong is only over 8 million. In 2005, SSE 50ETF was listed on Shanghai Stock Exchange, marking the birth of domestic ETF market. Then, after more than ten years of rapid development, as of September 20 19, there were 232 ETFs in China, with a scale of nearly 650 billion yuan, more than double that at the beginning of 20 18. Including 72 large-scale ETFs, 36 strategic ETFs, 63 industry ETFs, 35 theme ETFs, 14 cross-border ETFs and 4 commodity ETFs.
3. Types of domestic exchange-traded funds
ETF has the advantages of simple investment logic, low cost, good liquidity and high asset allocation efficiency. After more than ten years of development, ETF has grown into a new force in the financial market, and it is still growing. According to different asset targets, ETF products mainly include stock ETF, bond ETF, gold ETF and currency ETF.
The investment target of stock ETF is the stock listed and traded on the stock exchange, and the investment goal is to closely track the corresponding stock index and control the tracking error and tracking deviation within a certain range. Stock ETF has the advantages of both funds and stocks, providing investors with a convenient, fast and low-cost investment channel. Take the Shanghai and Shenzhen 300ETF as an example. Since the price trend of ETF is consistent with the Shanghai and Shenzhen 300 Index, buying and selling an ETF is equivalent to buying and selling 300 tradable shares at the same time.
The investment targets of bond ETF are interest rate bonds and credit bonds of Shanghai Stock Exchange or inter-bank bond market. By investing in bond ETFs, investors can easily invest in a package of bonds. Take the national debt ETF as an example. The target index it tracks is the five-year government bond index of Shanghai Stock Exchange. Investing in treasury bonds ETF is equivalent to buying a portfolio of treasury bonds with a duration of about 5 years.
Gold ETF is a commodity ETF product that tracks the spot price of gold. Mainly invest in gold spot contracts with purity higher than 99.95% listed on Shanghai Gold Exchange. At the same time, through gold leasing business and gold swap business, some fund operation and management expenses are covered, so that investors can fully enjoy the investment income of gold price. At present, the largest gold ETF on the market is Huaan Gold ETF (code 5 18880). As of 20 19, 19129, its equivalent gold exceeded 25 tons, accounting for more than half of the market share.
Currency ETF, also known as transactional money market fund, is a kind of money market fund that can be bought and sold in the secondary market of the exchange and redeemed on the exchange floor. The product positioning of ETF is a cash management tool for on-site margin, which is characterized by T 0 trading, stable income and suitable for idle funds.
In addition to various ETFs classified according to investment targets, ETFs can also be divided into single-market ETFs, cross-market ETFs and cross-border ETFs according to different investment markets. Single market ETF refers to ETF with single market index, such as Shanghai Stock Exchange Index, including Shanghai Stock Exchange 180ETF and Shanghai Stock Exchange 50ETF. Cross-market ETF refers to cross-market index ETF, that is, the index across Shanghai and Shenzhen stock markets, including Shanghai and Shenzhen 300ETF and CSI 500ETF. Cross-border ETF refers to ETF listed on domestic stock exchanges and tracked by overseas market index composed of overseas capital market securities. In addition, ETFs can be divided into leveraged ETFs and reverse ETFs according to their different operating modes.
This article comes from Modu Asset Management Company.
Related Q&A: What is the significance of futures etf? ETFs generally refer to transactional open index funds. The difference between stock index futures and ETF is as follows: 1. Substantial difference ETF is essentially an index fund, which can be listed on the exchange and the fund share can be changed. So that investors can buy and sell funds representing the "underlying index" just like buying and selling stocks. Stock index futures are standardized futures contracts with stock price index as the subject matter. The two sides agreed that on a specific date in the future, the underlying index can be bought and sold according to the size of the stock price index determined in advance, and the difference will be settled in cash after the expiration. 2. ETF with different characteristics disperses investment and reduces investment risk; It has the characteristics of both stocks and index funds; ETF allows investors to purchase and redeem continuously, but when ETF redeems, investors get shares instead of cash, and at the same time, they are allowed to purchase and redeem after reaching a certain scale. Using stock index futures arbitrage, when the futures premium exceeds a certain range, short the stock index futures and buy the index components of the stock index futures at the same time, or when the futures premium exceeds a certain range, short the stock index ETF by doing multiple stock index futures at the same time, which can reduce the daily average amplitude and monthly average amplitude of the stock market and restrain the irrational fluctuation of the stock market. Transactional open-end index fund is a special type of open-end fund, which combines the operating characteristics of closed-end fund and open-end fund. Investors can buy or redeem fund shares from fund management companies, and at the same time, they can buy and sell ETF shares at market prices in the secondary market like closed-end funds. However, the purchase and redemption must use a basket of stocks for fund shares or use fund shares for a basket of stocks. Because there are both secondary market transactions and subscription and redemption mechanisms, investors can carry out arbitrage transactions when there is a difference between the market price of ETF and the net value of fund units. The existence of arbitrage mechanism makes ETF avoid the common discount problem of closed-end funds. Hong Kong stock ETF refers to a transactional open index fund (ETF) with the Hong Kong stock market index as the underlying index. The Hong Kong stock ETF of Shenzhen Stock Exchange mainly has the following characteristics: First, the underlying index is the Hong Kong stock market index, and passive investment is implemented. The existing ETFs listed on Shenzhen Stock Exchange are all domestic stock indexes, and Hong Kong stock ETFs are the first batch of ETF products with overseas stock indexes as the underlying index. For example, the Chinese Hang Seng ETF on sale is based on the Hong Kong Hang Seng Index. Secondly, Hong Kong stock ETFs are subscribed, subscribed, redeemed and traded in RMB in China. The subscription and subscription funds are exchanged by fund managers and invested in the Hong Kong stock market. Third, the ETF share of Hong Kong stocks, like other listed funds, is listed and traded on Shenzhen Stock Exchange. Fourth, the Hong Kong stock ETF purchases and redeems all cash replacement. Since domestic investors can't directly hold Hong Kong stocks, the subscription and redemption of Hong Kong stock ETFs are in the form of all-cash substitution, and fund managers buy and sell corresponding portfolio securities on behalf of investors in the Hong Kong market, and the buying and selling costs are borne by investors. In addition, in order to facilitate investors holding foreign exchange to invest in Hong Kong stock ETFs, the linked funds of Hang Seng ETF have been subscribed and subscribed in RMB and USD, and the shares of linked funds subscribed or subscribed by investors in RMB/USD are still RMB/USD after redemption.