When ETFs Meet Fixed Deposits
Why should I invest in ETFs?
Let's start with two terms: 1. ETF. 2. ETF Connections.
What is an ETF?
ETFs are called exchange traded funds or exchange-traded open-ended index funds, which are simply a combination of the words trading, index and fund. The tool that you get after is an index fund that you are free to go buy and sell. Although it doesn't look very understandable, it's actually an index fund.
What does ETF-Linked mean?
Some clients have stock accounts and can buy ETFs directly and trade them like stocks, but some clients don't have stock accounts and also If you don't want to open it, how do you go about buying an index fund? This is where the new investment variety comes in - ETF-linked.
ETF-linked: investors put their money into ETF-linked, and then we use the money in the ETF-linked fund to help people invest into the ETFs. in general, the percentage of ETF-linked investments in ETFs is at least 90% of the fund's net assets, so the two The risk-reward is also very similar.
The index fund is also a product that Buffett has long recommended, and in the recent 2020 shareholder meeting, Buffett said there was no reason to stop investing in the S&P 500 index fund, which shows that in the eyes of the investment guru, the index fund is also a very useful variety and tool.
Index funds have grown dramatically in recent years
Index funds have grown so rapidly in recent years that they can no longer be treated as a niche and will receive more and more attention in the future.
In the United States after the financial crisis in 2008, there have been investors to realize that many active fund managers in bull and bear markets. It didn't do that well either, and started putting a lot of its stock into index funds. So in the U.S., since the 2008 financial crisis, index funds have been expanding very rapidly, and now in 12 years, the size of It has risen nearly ten times more and is very popular abroad.
Why do index funds endure?
Why is it possible to outperform most investors just by buying dozens of stocks or 100s of stocks?
Because it will renew itself metabolically, the market hotspots are endless, the current may be new energy good, but tomorrow may be cloud computing prevail, every day to receive new news impact, it is difficult to do may be neutral.
But the index is very objective, there will be a process of survival of the fittest, every six months or every other quarter will remove some of the stocks that do not meet the standards, the equivalent of the market leading companies to focus on picking out, if you want to invest in the market's leading stocks, then the selection of index funds is a relatively good choice.
The current registration reform of the ChiNext continues to implement, more and more new stocks to enter, there may be most of the stocks are down but the index The upside scenario. Because the index will select leading companies in the industry to compile the index, some marginal stocks will not be included in the index. This is a future investment trend, and the index may show better earnings characteristics than individual stocks in the future.
What are the characteristics of ETFs compared to stocks?
In fact, ETFs are the same as trading stocks for OTC investors, with no high threshold and no stamp duty when trading. . Stamp duty is 1 in 1,000, so if you drop the stamp duty, your costs are halved straight away, or even higher. And generally, index funds also charge very low management fees, generally only about 1/3 of their active counterparts, saving Some fees are recommended to make the index a good choice if you hold it for the long term or do the swing for the short term.
