1.Exchange-traded ETFs typically have lower risk and higher yield potential than outright holdings.
Due to the high volatility of ** and the possibility of being affected by market manipulation, its risk level is high, and the volatility is large, resulting in unstable returns. In contrast, as an ETF of on-exchange trading products, it provides a more stable investment choice than **, and its volatility is relatively mild, most products can achieve steady appreciation, and index ETFs are not subject to the possibility of manipulation, and because they are traded on the floor, they mainly invest in ** portfolio, and the weight allocation of the portfolio is clear and clear. As a result, they are often able to offer higher yields than traditional over-the-counter** while taking on lower risk. #etf**#2.ETFs have a variety of profit models, and there are arbitrage opportunities.
ETFs can be subscribed and redeemed over-the-counter, or bought and sold on the exchange, when there is a difference between the net value of ** and the market**, investors can take advantage of this difference through arbitrage operations, which not only avoids the possible discount problem of closed-end **, but also may bring additional income.
3.ETFs are more transparent.
The net value of an ETF is closely linked to the index it tracks and changes with the index, which makes the ETF's information more open and transparent. As a result, investors can more accurately judge the future trend of ETFs, so as to make more appropriate buying and selling decisions to increase investment returns and reduce investment risks.
4.ETFs are less expensive to trade.
There is a significant difference between the management fee rate of the Ordinary Index** and the ETF, which is approximately 12%, while the ETF's management fee is around 02% (the exact fee rate may vary depending on the trading platform), and this 1% difference can have a significant impact on large investors, in addition to the very low commission paid to buy ETFs, which is generally as low as 000005. There is no need to pay stamp duty, which further reduces the transaction cost of the ETF and saves investors a lot of money in the long run.
5.ETFs have a low investment threshold and high profit potential.
For individual investments, some leading stocks may be very high, raising the investment threshold. As an index** ETF, it also lowers the investment threshold while meeting investors' investment needs for the target index sector, and the unit price of the ETF is low, usually between a few dimes and a few yuan, and investors can participate in the purchase with a low threshold. Therefore, with the same amount of funds, investors can get more shares by buying ETFs, and when the net value of the ETF grows, they can sell it to get more returns.
6.Investing in ETFs is less difficult.
Many investors face challenges when choosing** or timing their entry, sometimes even if they are bullish on a certain sector, they lose money due to improper stock selection; Or trying to enter the market at a low level, only to be firmly found, and the ETF solves these problems by investing in all of the index's **, operating according to the established rules. If investors are optimistic about a certain sector, buying the corresponding ETF can avoid the loss caused by the wrong choice, and there is no need to be overly entangled in the timing of entry when buying an ETF, because from the long-term trend of the market, the income of the capital market generally fluctuates to the upper right. Choosing an ETF can solve many investment problems and reduce the difficulty of investment.
7.ETFs are more diversified.
Buying an ETF is equivalent to investing in a basket of ETFs, each of which contains dozens, if not hundreds, of the corresponding index. The impact of the rise and fall of a single ** on the index is limited, so the risk of investors is dispersed to the long ** ticket, which reduces the possibility of loss and at least protects the safety of the principal.
The above is my professional answer to ETFs, I hope it can help you!