1 For example, money funds make money by paying the interest income of bank deposits and the maturity income of short-term bonds.
2. There may be three ways for bond funds to make money, namely, interest income due to bonds they eat, trading income due to fluctuations in the bond market, and income from insufficient stock investment.
3. The main way for stock funds to make money is to invest in stocks, and realize income through stock price rise or dividends of listed companies. Because of different investment directions, funds also have different income and risk characteristics.
Stock funds can be divided into preferred stock funds and common stock funds according to the types of stocks. Preferred stock fund is a kind of stock fund with stable income and less risk. Its investment targets are mainly preferred shares issued by companies, and its income mainly comes from dividend income.
Common stock funds aim at pursuing capital gains and long-term capital appreciation, and their risks are higher than those of preferred stock funds.
According to the degree of diversification of fund investment, equity funds can be divided into general common stock funds and specialized funds. The former refers to the diversification of fund assets into various ordinary stocks, while the latter refers to the investment of fund assets in some special industry stocks, which is risky but may have better potential returns.
According to the purpose of fund investment, stock funds can be divided into capital appreciation funds, growth funds funds and income funds. The main purpose of capital appreciation fund investment is to pursue rapid capital growth, thus bringing capital appreciation. This kind of fund is risky and has high returns.
It is risky for growth funds to invest in common stock with growth potential and income. Stock income funds invest in stocks issued by companies with stable development prospects, and pursue stable dividends and capital gains. This kind of fund has low risk and low income.
Extended data:
Fund risk:
Investing in hedge funds can increase the diversity of the portfolio, and investors can reduce the overall risk exposure of the portfolio. Hedge fund managers use specific trading strategies and tools to reduce market risk and obtain risk-adjusted returns, which is consistent with investors' expected risk level.
The return of an ideal hedge fund has nothing to do with the market index. Although "hedging" is a means to reduce investment risks, hedge funds, like all other investments, cannot completely avoid risks. According to the report released by hennessey Group, during the period from 1993 to 2000, the fluctuation range of hedge funds was only about 2/3 of the S&P 500 index.
1 Transparency and regulatory matters
Because hedge funds are private equity funds, there is almost no requirement for public disclosure, and some people think it is not transparent enough. There are also many people who believe that compared with other financial investment management companies, hedge fund management companies are subject to less supervision and lower registration requirements, and hedge funds are more susceptible to special risks caused by managers, such as deviation from investment objectives, operational errors and fraud.
20 10 the new regulatory regulations proposed by the United States and the European union require hedge fund management companies to disclose more information and improve transparency. In addition, investors, especially institutional investors, also urge hedge funds to further improve risk management through internal control and external supervision.
With the increasing influence of institutional investors, hedge funds have become more and more transparent, and more and more information has been published, including valuation methods, positions and leverage.
2. The same risks as other investments.
There are many similarities between the risks of hedge funds and other investments, including liquidity risk and management risk. Liquidity refers to the ease of buying, selling or realizing assets; Similar to private equity funds, hedge funds also have a closed period, during which investors cannot redeem them. Management risk refers to the risk brought by fund management.
Management risks include: unique risks of hedge funds such as deviation from investment objectives, valuation risk, capacity risk, concentration risk and leverage risk. Valuation risk means that the net asset value of an investment may be miscalculated. Too much investment in a certain strategy will lead to capacity risk. If the fund's exposure to an investment product, department, strategy or other related funds is too large, it will cause concentrated risk.
These risks can be managed by controlling conflicts of interest, limiting the allocation of funds and setting the scope of strategic exposure.
Some people think that some funds, such as hedge funds, will prefer risks in order to maximize returns within the risk range that investors and managers can tolerate. If managers invest in funds themselves, they will have more incentive to improve risk supervision.
3. Risk management
Most countries stipulate that hedge fund investors must be experienced and qualified investors, be aware of the risks of investment and be willing to bear these risks, because the possible benefits are related to risks. In order to protect funds and investors, fund managers can adopt various risk management strategies.
The Financial Times said, "Large hedge funds have the most mature and accurate risk management measures in the asset management industry." Hedge fund management companies may hold a large number of short-term positions or have a particularly comprehensive risk management system.
The fund can set up a "risk officer" to be responsible for risk assessment and management, but it can not interfere with the transaction, or it can adopt a formal portfolio risk model and other strategies. Various measurement techniques and models can be used to calculate the risk of hedge fund activities; According to the different fund size and investment strategy, fund managers will adopt different models.
Traditional risk measurement methods do not necessarily consider the normality of returns and other factors. In order to comprehensively consider all kinds of risks, we can make up for the defect of measuring risks by adding models such as impairment and "lost time".
In addition to evaluating the market-related risks of investment, investors can also evaluate the risk that the mistakes or frauds of hedge funds may bring losses to investors according to the principle of prudent operation. Matters that should be considered include the organization and management of business by hedge fund management companies, the sustainability of investment strategies and the ability of funds to develop into companies.
References:
Fund-Baidu Encyclopedia