Many investors now have many misconceptions about ETF funds, which not only makes many people fearful in the investment process, but also increases investment risks. ETF funds are actually a kind of fund with relatively low market penetration, and customer participation itself is very limited. One: It is only for the exclusive use of large investors. Many investors mistakenly believe that the investment threshold for ETF funds is too high, with a minimum redemption unit of a few hundred thousand shares or a million shares and a basket of stocks in a cumbersome and complex physical redemption method, which is only suitable for investors with a large amount of capital to participate. In fact, ETF fund shares can be listed and traded like stocks and are exempt from Persimmon tax, with one lot (100 shares) as the starting point.
1, It is only for the exclusive use of large investors. Many investors mistakenly believe that the investment threshold for ETF funds is too high, with a minimum redemption unit of a few hundred thousand shares or a million shares and a basket of stocks, making it cumbersome and complicated for investors with a large amount of capital to participate. In fact, ETF fund shares can be listed and traded like stocks and are exempt from Persimmon tax, with one lot (100 shares) as the starting point.
2, Profits can only be made in bull markets. As the scope of ETF funds expands, many of the strategies used are not related to the bull or bear phase of the market. For example, volatility means profit opportunities for swing operations, price difference means profit opportunities for pair trading strategies, and short selling in a falling market for ETF funds that are included in the underlying of financing and financing, etc.
3, Only for speculative short-term speculation.
ETF funds have both trading and allocation functions. As an index fund, ETF funds can perfectly shoulder the mission of medium and long-term indexing investment and portfolio asset allocation, and the transaction cost and tracking error are much lower than those of ordinary open-ended index funds. With innovative products such as cross-border ETF funds, fixed annualized return ETF funds, commodity ETF funds and even leveraged ETF funds, ETF funds can provide even richer medium and long-term asset allocation solutions.
4, Only keen on arbitrage trading. Instantaneous arbitrage in primary and secondary markets is only one of the many strategies applied by ETF funds, and the room for profit has been very small in recent years. In addition to swing operation and asset allocation, many strategies such as intraday T 0 trading, industry rotation, style rotation, market neutrality and long/short have been applied in practice. Even in arbitrage trading, multi-strategy event arbitrage, cash and futures arbitrage, cross-market arbitrage, etc. are constantly expanding the boundaries of ETF fund applications.
5, Only perceived to be extremely risky. Equity ETF funds operate near full positions and have high volatility in net value. However, ETF funds can be regarded as "super stocks" composed of many constituent stocks, which can fully diversify risks compared to single stocks. For investors with weak stock selection ability in the order of capital, ETF funds are an excellent tool to diversify non-systematic risks of individual stocks.
6, Focus only on high depth strategies. Some investors believe that the more complex the ETF fund trading application strategy, the more sophisticated the trading system and the higher the frequency of trading, the higher the probability of profit and the higher the expected annualized return. However, practice shows that the complexity of ETF trading strategies, trading frequency and expected annualized returns are not necessarily proportional. In practice, there are many opportunities for ordinary investors to achieve satisfactory returns by analyzing simple technical indicators and even by using simple fixed investment strategies.
