In the field of fund investment, exchange-traded funds (ETFs) and over-the-counter (OTC) funds are the two main trading methods, which have significant differences in trading mechanisms, fees, channels, and other aspects.

Exchange-Traded Fund (ETF) Trading Method

Exchange-traded funds refer to fund products that are traded on stock exchanges, with a trading method similar to stocks. They are mainly bought and sold through a securities account on the exchange, including real-time trading and redemption of ETFs within the exchange.

Real-time trading within the exchange: The operation is exactly the same as buying and selling stocks.

Redemption of ETFs within the exchange: Through the designated ETF entry in the broker's app, investors can subscribe to and redeem ETFs within the exchange.

Steps to Purchase ETFs

Select an ETF: Investors first need to choose an ETF product that meets their investment needs and risk preferences.

They can find relevant information, including the fund's investment strategy, risk-return characteristics, historical performance, etc., through the official website of the fund company, the broker's website, or other investment platforms.

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Open a Securities Account: If you do not have a securities account, investors need to choose a suitable broker to open a securities account. A securities account is a necessary condition for trading ETFs within the exchange.Funds Preparation: Ensure that there are sufficient funds in the account for purchasing exchange-traded funds. Funds can be transferred into the securities account through bank transfers, Alipay, and other methods.

Order Placement: Log in to the securities trading software or mobile app, select the exchange-traded fund you wish to purchase, enter the amount or shares to buy, and set the trading price or limit price.

Trade Confirmation: Once the order is submitted, it will be processed by the exchange. If the market allows the trade, it will be executed. After the trade is completed, the broker will send a trade confirmation message to the investor, confirming the completion of the transaction.

Holding and Redemption: After holding exchange-traded funds, investors can realize redemption by selling out.

Open the trading software or mobile app, select the exchange-traded fund to be sold, enter the shares or amount to be sold, and set the trading price or limit price; after submitting the order, wait for the trade to be executed, and then the broker will send a trade confirmation message.

Off-Exchange Fund Trading Methods

Off-exchange funds refer to funds that are not listed and traded on stock exchanges, mainly purchased and redeemed through channels such as fund companies, banks, and brokers; there is only one trading method for off-exchange funds, which is off-exchange subscription and redemption.

Steps for Purchasing Off-Exchange Funds

Direct Sales through Fund Companies: Many fund companies offer direct sales services for off-exchange funds. Investors can purchase and redeem through the fund company's official website or client.

The advantage of this method is that the process of purchasing and redeeming is relatively simple, and the costs are relatively low; however, it should be noted that the direct sales services of different fund companies may vary, and investors need to carefully understand the relevant regulations.Purchasing through banking channels: Many banks offer the purchase and redemption services for over-the-counter (OTC) funds, allowing investors to operate through bank counters or online banking.

The advantage of this method is its convenience and speed, and it allows for direct transfer of funds into the fund account; however, it should be noted that the fund products sold by banks may incur certain sales and management fees.

Purchasing through third-party platforms: Numerous third-party platforms, such as Alipay, Ant Fortune, etc., also provide the purchase and redemption services for OTC funds.

The advantage of this method is its ease of operation, and it may come with some preferential policies; however, it should be noted that the service fees of third-party platforms might be relatively higher.

In addition to the above methods, there are other ways to trade OTC funds, such as through securities firm counters, insurance companies, etc.; investors can choose the appropriate trading method based on their needs and actual situation.

Overall, the trading methods for exchange-traded funds (ETFs) and OTC funds each have their characteristics, and investors should select the appropriate trading method and fund products based on their investment objectives and risk tolerance.