| Category | ETF | Stock | Index Fund | Active Fund | Index Futures |
|---|---|---|---|---|---|
| Investment Purpose | Specific index | Excessive profit on index | Specific index | Excessive profit on index | Hedge and gain |
| Legality | Collective investment securities | Security with stake | Collective investment securities | Collective investment securities | Derivative product |
| Transparency | High | High | Average | Average | High |
| Liquidity | High | High | Low | Low | High |
| Settlement day | T+2 | T+2 | T+3 | T+3 | T+1 |
| Leverage function (purchase on margin) |
Yes | Yes | No | No | Yes |
| Transaction cost | Broker Transaction Fee & Commission (approximately 0.5%) |
Broker Transaction Fee |
commission (1~2%) |
commission (2~3%) |
Broker Transaction Fee |
| Transaction with All Securities Firms | Yes | Yes | Limited to selling company | Limited to selling company | Yes |
| Systematic Risk | Systematic Risk | Systematic/ Unsystematic Risk |
Systematic Risk | Systematic/ Unsystematic Risk |
Systematic Risk |
| Diversification | Yes | No | Yes | Yes | Yes |
| Securities Transaction Tax | Exempt | Sales | n/a | n/a | Exempt |
The above figure shows that ETFs have characteristics of funds and stock/futures. In other words, their unique features, such as management goals, legality, diversified investment, tax and remuneration, coincide with those of funds, and their characteristics such as cashability, liquidity, or trading convenience are similar to those of stock/futures. ETFs are innovative products that provide a wide choice of investment with advantages of both funds and stock/futures.