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Features of funds:
Like stocks, bonds, time deposits, foreign exchange and other investment tools, securities investment funds also provide investors with an investment channel. So, compared with other investment tools, what are the characteristics of securities investment funds?
(1) Integrated financial management and professional management.
Funds pool the funds of many investors and entrust fund managers to make simultaneous investments, showing the characteristics of collective financial management. By pooling funds from many investors and accumulating a small amount into a large amount, it is conducive to giving full play to the scale advantage of funds and reducing investment costs. The fund is invested, managed and operated by the fund manager. Fund managers generally have a large number of professional investment researchers and a strong information network, which can better conduct all-round dynamic tracking and analysis of the securities market. By handing over funds to fund managers for management, small and medium-sized investors can also enjoy professional investment management services.
(2) Portfolio investment to spread risks.
In order to reduce investment risks, my country's Securities Investment Fund Law stipulates that funds must conduct fund investment operations in the form of portfolio investment, making "portfolio investment and risk diversification" a major feature of the fund. The scientific nature of "portfolio investment and risk diversification" has been proven by modern investment science. Due to their small amount of funds, small and medium-sized investors generally cannot diversify investment risks by purchasing different stocks. Funds usually buy dozens or even hundreds of stocks. Investors buying funds are equivalent to buying a basket of stocks with a small amount of money. Losses caused by the decline of some stocks can be compensated by the profits of the rise of other stocks. Therefore, you can fully enjoy the benefits of portfolio investment and risk diversification.
(3) Benefits are shared and risks are borne.
Fund investors are the owners of the fund. Fund investors only bear risks and only enjoy returns. The surplus from fund investment income after deducting the expenses borne by the fund will all belong to fund investors and will be distributed according to the proportion of fund shares held by each investor. Fund custodians and fund managers who provide services for funds can only charge certain custody fees and management fees in accordance with regulations, and do not participate in the distribution of fund income.
(4) Strict supervision and transparent information.
In order to effectively protect the interests of investors and enhance investors’ confidence in fund investment, the China Securities Regulatory Commission implements relatively strict supervision of the fund industry and severely cracks down on various behaviors that are detrimental to the interests of investors. , and force funds to conduct relatively sufficient information disclosure. In this case, strict supervision and information transparency have become a distinctive feature of the fund.
(5) Independent hosting to ensure security.
The fund manager is responsible for the investment operations of the fund and does not itself handle the custody of fund assets. The custody of fund assets is the responsibility of the fund custodian, who is independent from the fund manager. This check and balance mechanism of mutual restraint and mutual supervision provides important protection for the interests of investors.
Introduction to open-end fund trading
◆Preparation process
Before purchasing a fund, investors need to carefully read the prospectus, fund contract and account opening procedures of the relevant fund. , trading rules and other documents. Each fund sales outlet should have the above documents for investors to consult at any time.
Individual investors need to bring an agent bank debit card and a valid ID card (ID card, military ID card or armed police card), while institutional investors need to bring their business license, organization code certificate or original registration certificate , as well as copies of the above documents with official seals, power of attorney, ID card and copy of the person in charge.
Bring the prepared information and fill in the fund business application form at the bank's counter branch. After completing the filling, receive a business receipt. Individual investors also need to receive a fund trading card, which can be used two days after the day of handling the fund business. Go to the counter to get the business confirmation. After receiving the business confirmation, the unit or individual can engage in the purchase and redemption of funds.
◆How to purchase
After completing preparations for opening an account, citizens can choose their own time to purchase funds. Individual investors can bring the debit card and fund transaction card of the agent bank and fill out the fund transaction application form at the counter of the agency outlet (institutional investors must stamp the reserved seal), which must be submitted before 15:00 on the day of purchase. The application will be accepted at the counter and a fund business receipt will be issued. Two days after handling fund business, investors can go to the counter to print the business confirmation letter.
◆How to Redeem
When investors intend to redeem their funds, they can bring the debit card and fund trading card of the account opening bank, also before 3 p.m. Fill out and submit the transaction application form, and after it is accepted at the counter, investors can inquire after 5 days and the redemption funds will be credited to their account.
◆How to withdraw
If a trading investor needs to withdraw a transaction, he or she can bring the fund trading card and bank debit card and fill in the transaction at the counter before 15:00 on the day of the transaction. Application form, indicating the withdrawal of the transaction. If it is after 15:00, some banks can make reservations for transactions based on the quoted price of the day and conduct transactions on the next working day. Currently, almost all banks and fund management companies support online fund trading.
◆Fund Dividend Principles
Fund Dividend Principles According to the Fund Law, fund management companies must distribute at least 90% of the fund’s net income in cash if they meet the dividend conditions. And it should be distributed at least once a year
The principle of open-end fund dividend distribution is: after the fund income is distributed, the net value of each fund share cannot be lower than the face value; bank transfer or other handling fees incurred when the income is distributed shall be borne by the investor; Under the premise of meeting the relevant fund dividend conditions, it is necessary to stipulate the maximum number of fund income distributions per year; the minimum proportion of fund income distribution each year; no income distribution will be carried out if the fund investment suffers a net loss in the current period; the fund's income for the current year must first make up for the previous year's losses before the current year's income can be distributed Allocation
Introduction to closed-end fund trading
1. Distribution principles and methods of closed-end funds
As the fund's income grows, the fund's net asset value per unit will increase, and the fund will distribute income to its investors.
In closed-end funds, investors can only choose cash dividends as dividends, because the size of closed-end funds is fixed and cannot be increased or decreased. Dividends are transferred directly to investors' accounts by the registration agencies of the Shenzhen and Shanghai Stock Exchanges through securities dealers.
2. How to go through the procedures for buying and selling closed-end funds
The fund units of closed-end funds are listed and traded on the securities exchange market like the stocks of ordinary listed companies. Therefore, just like buying and selling stocks, the first step in buying and selling closed-end funds is to open an account at the securities business department, which includes a fund account and a capital account (also known as a margin account).
If you are opening an account as an individual, you must bring your ID card or military officer ID card; if you are opening an account as a company or enterprise, you must bring a copy of the company's business license, legal person certificate, The legal person's power of attorney and the handler's ID card.
Before starting to trade closed-end funds, you must deposit cash at a bank that is connected to the securities firm you have chosen, and then go to the securities business department to transfer the money in the passbook to your margin account. . After that, you can buy and sell fund units through entrusted declarations from the securities business department or through invisible offers or telephone entrusted declarations.
It must be noted that if you already have a stock account, you do not need to open another fund account. The original stock account can be used to buy and sell closed-end funds. However, fund accounts cannot be used to buy and sell stocks, but can only be used to buy and sell funds and treasury bonds.
The transaction process of closed-end funds (listed funds) is shown in Figure 5-8. Figure 5-8 Closed-end fund (listed fund) transaction process
3. Pricing and discount rate of closed-end funds
After the establishment of a closed-end fund, the fund shares held by investors can be listed and traded on the stock exchange, but the size of the fund does not change, so it is called "closed-end fund" "style" fund. In other words, the "purchase and sale of shares" of open-end funds is conducted between investors and the fund company that sponsors this fund product, while the "purchase and sale of shares" of closed-end funds is conducted between investors.
The pricing of closed-end funds is formed based on the relationship between supply and demand during the buying and selling process of investors on the stock exchange, that is, the secondary market. The net value of a closed-end fund is calculated based on the fund's investment status and the total fund assets divided by the total fund shares. It is the amount of fund assets actually represented by each fund share. Price versus net worth is determined by supply and demand.
At present, the prices of closed-end funds are mostly lower than the net value, that is, they are mainly traded at a discount. However, when closed-end funds were first established, there were also premium transactions. The subscription and redemption of open-end funds are calculated based on the net value, while the price of closed-end funds is affected by the relationship between supply and demand because it is a transaction between investors. When a closed-end fund trades in the secondary market at a price lower than its actual net value, the situation is called a "discount."
Discount rate = (net value per unit share - market price per unit) / net value per unit share
According to this formula, when the discount rate is greater than 0 (that is, the net value is greater than the market price), it is a discount, and when the discount rate is less than When 0 (that is, the net value is less than the market price), it is a premium. In addition to investment objectives and management level, the discount rate is an important factor in evaluating closed-end funds.
Due to size restrictions and liquidity effects, closed-end funds generally have discount rates. High discount rates are currently an important factor triggering investment.
For example, if the net value of a closed-end fund on a certain day is 2.23 yuan, and the closing price on that day is 1.76 yuan, then the discount value of this fund is:
2?23-1?76=0?465 (yuan)
The discount rate is:
(2?23-1?76)/2?23=20?85%
Even if the fund does not rise or fall when the fund is closed and opened in the future, it will still be able to obtain a return of close to 21%.
4． Relevant regulations on closed-end fund investment transactions
The listed transactions of closed-end funds have the following characteristics:
① The purchase and sale orders of fund units adopt the principles of "openness, fairness and impartiality" and "price priority" , time priority” principle.
② Fund trading orders are carried out in standard lots.
③The trading price of fund units is based on the net asset value of the fund unit and fluctuates due to the influence of market supply and demand.
④ You can entrust the purchase and sale of fund units at any time in the business hall of the securities market.
Popular Knowledge on Funds
Recently, I have seen many netizens often asking what funds are about, as if funds are a very complicated and difficult thing to understand, and they also recommend reading articles on fund knowledge. can't read. Therefore, I often think about how to let these friends understand what a fund is in the shortest possible time and show them these funds that are not mysterious. So I came up with the idea to try to explain what a fund is in as simple a language as possible. I hope that these funds It helps for friends to learn about the fund as soon as possible.
Suppose you have money and want to invest in bonds, stocks, and other securities to increase value, but you have neither energy nor professional knowledge, and the money is not much, so you want to partner with 10 other people. To invest, hire an investment expert (theoretically someone higher than me), and use the combined assets to increase investment value. But here, if more than 10 investors negotiate with investment experts at any time, the matter will not be chaotic, so we recommend one of the most knowledgeable investors to take the lead in handling this matter. Regularly give him a certain percentage of the assets jointly invested by everyone, and he will pay the masters' labor fees on their behalf. Of course, he himself takes the lead in organizing large and small things, including running errands from house to house, and always reminds the masters about the risks. Point, regularly announce investment profits and losses to everyone, etc. Don't work in vain, the money in the commission also includes his labor fees. These things are called partnership investments.
Amplifying this partnership investment model 100 times or 1,000 times is a fund.
If this kind of private partnership investment activity establishes a complete contract between investors, it is a private equity fund (it has not yet been recognized by the relevant laws and regulations of the national financial industry in our country).
If this kind of partnership investment activity is approved by the national securities industry management department (China Securities Regulatory Commission), and the lead operator of this activity is allowed to raise funds from the public to attract investors to join the partnership, this will It is the issuance of public funds, which are now common funds.
What is the role of a fund management company? The fund management company is the lead operator of this kind of partnership investment, but it is a legal person and its qualifications must be approved by the China Securities Regulatory Commission. The fund company, like other fund investors, is also one of the partner investors. On the other hand, because it takes the lead in the operation, it has to withdraw labor fees (called fund management fees) at a certain proportion from the assets jointly contributed by everyone every year to hire on behalf of the investors. The investment experts (i.e., fund managers) who are responsible for trading on behalf of the managers, as well as those who help the experts collect information and conduct research, regularly announce the assets and income of the fund. Of course, these activities of fund companies are approved by the China Securities Regulatory Commission.
In order to ensure the safety of the assets jointly produced by everyone and prevent them from being misappropriated secretly by the fund company, the lead operator, the China Securities Regulatory Commission stipulates that the assets of the fund cannot be placed in the hands of the fund company. The fund company and fund manager only Don’t touch money during trading operations. For bookkeeping and money management, you need to find someone who is good at it and has high credibility. Of course, this role belongs to the bank. So these investments (that is, fund assets) are placed in the bank, and a special account is established, which is accounted for by the bank, which is called fund custody. Of course, the bank's service fees (called fund custody fees) must also be paid annually in proportion to the assets of the partnership. Therefore, relatively speaking, fund assets only have the risk of losses due to poor operations by those experts, and there is basically no risk of being stolen. From a legal perspective, even if the fund management company goes bankrupt or even the custodian bank has an accident, the people collecting debts from them have no right to touch the assets of our fund accounts, so the safety of fund assets is very guaranteed.
If this kind of public offering fund is declared established after raising investors within a specified period of time (the state stipulates that it must reach at least 1,000 investors and a scale of 200 million yuan before it can be established), it will stop attracting other investors. investors, and agreed that no one can withdraw their capital midway, but by a certain year and month from now on, we will all break up and share the burden. If you want to cash out in the middle, you can only find someone else to sell it. This is a closed-end fund.
If this kind of public fund still welcomes other investors to invest in it at any time after it is announced, and at the same time allows everyone to withdraw part or all of their own funds and deserved income at any time, this is an open-end fund. fund.
Regardless of whether it is a closed-end fund or an open-end fund, if you want to facilitate everyone's buying and selling, you can find a place like an exchange (securities market) to list the fund, and trade it freely among investors at market prices, that is Listed funds.
The number of times each fund stipulates dividends per year is explained when recruiting funds. There are no fixed dividends or splitting regulations.
Dividends mean that the fund company must sell some stocks to pay dividends to fund holders who receive dividends. This may result in selling the stocks in their hands that have risen just enough, which will affect the operation of funds.
Split is to change the original high net worth into a net worth of 1 yuan. In this way, the fund company does not need to buy stocks to obtain cash, and it is equivalent to 1 share of the original change for the holder. It became many portions.
Some people like funds that frequently pay dividends because it is safe to make money, but it becomes more difficult for fund companies to operate and their profitability is affected.
The maximum closing period for the new fund is 3 months, but it can be brought forward.
Fund purchase methods and classifications
Buying funds is very simple and can be traded in the securities hall, that is, in the secondary market, just like ordinary stock investments. You can also subscribe through the selling points of banks that cooperate with funds. Many banks have fund sales, including Industrial and Commercial Bank of China and China Construction Bank. If you want to buy it, you can inquire in detail about the relevant fees and interest ratio; and then study the internal situation and past performance of the fund management company. Funds are mainly suitable for people who lack investment time and experience. Growth funds have the main goal of pursuing long-term basic gains. Investment objects mainly focus on stocks with good performance, earnings outlook and active market performance. This type of fund pursues profits, fluctuates with market changes, and has a relatively high portfolio turnover rate. This type of fund has a low "benefit distribution" each year and focuses on pursuing maximum long-term capital appreciation. We can use growth funds to accumulate future pensions, children's education funds, purchase real estate funds, etc., which are suitable for those who are younger or have higher affordability. Income funds emphasize the pursuit of fixed and stable income. This type of fund mainly chooses securities whose investment objectives can bring fixed income, such as bonds, bills, blue chip stocks, etc. The risk of missing principal in such funds is lower, and the return on investment is slightly better than bank regular savings. This type of fund is very suitable for retirees or those who hope to receive fixed income after investing. Balanced funds are between growth and income funds, diversifying funds into stocks and bonds, hoping to find a balance between capital growth and fixed income. It can meet the requirements of people who are not willing to take risks and have a relatively conservative personality but also want to effectively accumulate a long-term fund. A value fund's investment style aims to buy stocks whose prices appear low relative to their intrinsic value, with the expectation that the stock price will return to its reasonable level. Index funds are a type of fund that are based on the principle of fitting the target index and tracking changes in the target index to achieve synchronized growth with the market. The investment of index funds adopts an investment strategy that fits the return rate of the target index, diversifying the investment in the component stocks of the target index, and strives to make the return rate of the stock portfolio fit the average return rate of the capital market represented by the target index. Fund investment objects include: stock funds, bond funds, currency funds, gold funds, futures funds, option funds, stock price index funds, foreign exchange funds, etc. Divided by investment area: single country funds, regional funds, and global funds (also known as international funds). Fund fixed investment income calculation formula: M=a(1+x)[-1+(1+x)n]/x, where M is the expected return, a is the amount of fixed investment in each period, x is the rate of return in one period, and n is Fixed number of investment periods (nth power in the formula). For example, assuming a monthly fixed investment of 500 yuan and an annual return of 12%, the fixed investment income for 20, 25, and 26 years are: M20≈480,000, M25≈890,000, and M26≈1.01 million. What is the difference between fund net value and cumulative net value? Fund net value is the report card of the fund on that day, while cumulative net value is the report card since the fund was established. Fund net value, to be precise, is called fund share net value, which refers to the actual value represented by each fund share of the fund at a certain point in time. It can be calculated through this formula: Net asset value of the fund on T day = (total fund assets on T day – total fund liabilities on T day)/total number of fund shares outstanding on T day. You will find that except for total liabilities, all values ??in the formula use real-time data. Therefore, the net value of fund shares can reflect fund performance intuitively and in real time, and people can use it to understand the operation of the fund. The cumulative net value of fund shares includes the previous dividend amount, so the cumulative net value of fund shares = the net value of fund shares + the cumulative dividend amount of the shares after the fund was established. The cumulative net value of fund shares can fully reflect the historical performance of the fund during its operation. When evaluating fund performance, investors should pay attention to the cumulative net value of fund shares.