The biggest feature of a broad-based ETF, as a representative of the passively managed**, is that the composition and adjustment of the portfolio strictly follow the index it tracks. This feature makes the operating model of a broad-based ETF more transparent. Investors can clearly understand the composition of the ** portfolio and the proportion of each ** note. This openness and transparency allows investors to more accurately assess the risks and potential benefits of their investments.
In contrast, the average portfolio is mainly actively managed by the manager. When investors choose ordinary, they rely more on the company's investment decisions and the manager's personal judgment. This approach to active management, while giving managers more flexibility, also means that investors may face more hurdles in understanding the specific composition of their portfolios.
In addition to the benefits of transparency, broad-based ETFs are also characterized by low fees. Since broad-based ETFs are passively managed, their operating costs are usually low, which naturally lowers the investment threshold for investors. In contrast, the average overhead may be relatively high depending on the way it is actively managed and the labor cost of the manager.
These differences have far-reaching implications for investors. First, the transparency and low fees offered by broad-based ETFs allow investors to have more information and data to support their investment decisions, thus better balancing risk and return. Secondly, low fees mean that investors can get a higher rate of return with the same amount of money, which is undoubtedly a huge advantage for long-term investors. Finally, the passive management of broad-based ETFs reduces the impact of human intervention and subjective judgment in investment decisions, so that the interests of investors can be more reliably protected.
At the time when "the scale of broad-based ETFs stood at the trillion mark", it not only shows that more and more investors are beginning to realize the advantages of broad-based ETFs, but also reflects the strong demand and preference of the market for passively managed**. This trend indicates that more investors may include broad-based ETFs in their portfolios in the future as one of the important tools to achieve asset appreciation.