Generally speaking, there are four ways to invest in indices: open-ended indexes, closed-end indexes, ETFs, and LOF indices, and now there is a fifth way to invest in indexes, which are connected. So what exactly is the connection, and what are its characteristics and advantages?Today, let's learn more about connectivity.
Connection** refers to investing the vast majority of ** assets in ETFs that track the same underlying index, closely tracking the performance of the underlying index, pursuing tracking difference and tracking error minimization, and adopting an open mode of operation**. In simple terms, Connect** is also through the purchase of different types or risk levels of financial products, such as bonds, bonds, etc., these assets are combined into a portfolio, and then managed and operated by the ** management company. As an index that can grow in tandem with the market, Connect** has attracted more and more attention and favor from investors.
Due to the unique investment approach of Connect**, it has a range of advantages. For example, the investment fee of connection** is relatively low, and generally speaking, there will be no management fee and custody fee for investing in the asset part of the ETF, which avoids the phenomenon of double charges. Moreover, the connection** has high flexibility and diversity, which can meet the needs of investors for regular investment and can also meet the needs of investors for conversion, and help investors dynamically customize different investment strategies according to demand and market changes, share risks and optimize asset allocation, so as to maximize returns. Relatively speaking, Connect** is a highly transparent investment product, and investors can check their asset portfolio and investment income at any time, so as to help investors better grasp market dynamics and control investment risks.
In addition, investors also need to recognize that the link is not the same as an ETF or FOF. The investment method and trading method of investor investment link** is different from that of direct investment ETF, but is the same as investing in ordinary open-ended **, and only needs to subscribe for or redeem the share** share in cash according to the net value announced at the end of the day;ETF Connect** is not the same as FOF, because it requires more than 90% of assets to be invested in a fixed target ETF, and cannot invest in multiple ETFs at will, so to some extent, the "shadow" of the type of connection and its target** is similar to the target ETF in terms of risk-return characteristics.
All in all, as an emerging way to invest in indexes, Connection also has its own characteristics and advantages, and investors also need to make rational choices according to their own needs.