Fund Encyclopedia Business Card

Fund can be divided into broad and narrow senses. In a broad sense, fund is a collective term for institutional investors, including trust investment funds, unit trust funds, Provident funds, insurance funds, retirement funds, funds of various foundations. Funds in the existing securities market, including closed-end funds and open-end funds, have the characteristics of income-generating functions and value-added potential. From an accounting perspective, funds are a narrow concept, meaning funds with specific purposes and uses. Funds are formed because investors from governments and public institutions do not require investment returns or investment recovery, but require funds to be used for designated purposes in accordance with legal provisions or the investor's wishes.

Table of Contents[Hide]

Popular explanation

Types of funds: open-end funds and closed-end funds

Hedge funds

QDII Fund

Index Fund

Exchange-traded open-end index fund

Warrant Fund

Corporate Fund

p>

Contract Fund

Balanced Fund

Insurance Fund

Trust Fund

Investment Fund

< p>Securities Investment Funds

Stock Funds

Bond Funds

Money Market Funds

Other Types

Related Proper nouns Fund net value

Fund fixed investment

Features of funds

The role of the fund market

Fund buying and selling guide

< p>Introduction to fund content

About the author

Table of contents

Popular explanation

Types of funds Open-end funds and closed-end funds

p>

Hedge Funds

QDII Funds

Index Funds

Exchange-traded open-end index funds

Warrant Funds< /p>

Corporate Fund

Contract Fund

Balanced Fund

Insurance Fund

Trust Fund

Investment Funds

Securities Investment Funds

Stock Funds

Bond Funds

Money Market Funds

Other types

Related terms Fund net value

Fund fixed investment

Features of funds

The role of the fund market

Fund Trading Guide

Introduction to Fund Content

About the Author

Table of Contents

[Edit this paragraph] Popular explanation

Suppose you have a sum of money that you want to invest in bonds, stocks and other securities to increase value, but you have no energy or professional knowledge, but you don’t have much money, so you want to invest in a partnership with 10 other people and hire An investment expert uses the assets jointly produced by everyone 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 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 national financial industry supervision laws and regulations 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 is the issuance of public funds, that is, Funds that are common to everyone now. Funds are an indirect form of securities investment. Fund management companies pool investors' funds by issuing fund units, which are managed by fund custodians (i.e. qualified banks). The fund managers manage and use the funds to invest in stocks, bonds and other financial instruments, and then assume the responsibility Investment risks and profit sharing. 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 invested by everyone and prevent them from being misappropriated secretly by the lead operator of the fund company, 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 are only responsible for trading operations and cannot touch the money. To keep accounts and manage money, you need to find someone who is good at it and has high credibility. Of course, this role must be from a 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 and agree to No one can withdraw 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 yourself. This is a closed-end fund. If after the establishment of this kind of public fund is announced, other investors are still welcome to contribute capital at any time, and at the same time, everyone is allowed to withdraw part or all of their own funds and deserved income at any time, this is an open-end fund. Whether it is a closed-end fund or an open-end fund, if in order to facilitate everyone's buying and selling, the fund can be listed on an exchange (securities market) and freely traded among investors at market prices, which is a listed fund. The number of dividends required by each fund each year is stated when recruiting the fund. There are no fixed dividends or splitting regulations. Dividend distribution means that the fund company must sell some stocks to pay dividends to fund holders. In this way, the stocks in their hands that have risen just right may be sold, which will affect the operation of funds. Splitting is to turn the original high net worth into a net worth of 1 yuan. In this way, the fund company does not need to sell the stock to obtain cash. For the holder, it is equivalent to the original one share becoming many shares. Some people like funds that frequently pay dividends because they are safe in pocket, but it becomes more difficult for fund companies to operate and their profitability is affected. The maximum closing period stipulated by the new fund is 3 months, but it can be brought forward.

[Edit this paragraph] Types of funds

According to different standards, securities investment funds can be divided into different types: (1) According to whether fund units can be added or redeemed, Can be divided into open-end funds and closed-end funds. Open-end funds are not listed for trading, and are generally purchased and redeemed through banks, and the fund size is not fixed; closed-end funds have a fixed duration, during which the fund size is fixed, and are generally listed and traded on securities exchanges, and investors buy and sell funds through the secondary market. unit. (2) According to different organizational forms, they can be divided into corporate funds and contract funds. A fund is established by issuing fund shares to establish an investment fund company, which is usually called a corporate fund; it is established by a fund manager, a fund custodian and an investor through a fund contract, which is usually called a contract fund. At present, my country's securities investment funds are all contract funds. (3) According to different investment risks and returns, they can be divided into growth, income and balanced funds. (4) According to different investment objects, it can be divided into stock funds, bond funds, money market funds, futures funds, etc.

Open-end funds and closed-end funds

(1) Open-end funds Open-end funds (LOF), the full English name is "Listed Open-Ended Fund" or "Open-End Funds" ”, which is called “listed open-end fund” in Chinese, and also known as mutual fund abroad. That is to say, after the issuance of a listed open-end fund, investors can either subscribe and redeem fund shares at designated outlets, or buy and sell the fund on the exchange. However, if investors subscribe for fund shares at a designated outlet and want to sell them online, they must go through certain transfer custody procedures; similarly, if they purchase fund shares online at an exchange and want to redeem them at a designated outlet, they must also Certain transfer procedures must be completed. It is a fund whose issuance amount is variable, the total number of fund shares (units) can be increased or decreased at any time, and investors can subscribe or redeem according to the fund's quotation at the business location designated by the fund manager. Compared with closed-end funds, open-end funds have the characteristics of no limit on the number of issuances, the buying and selling price is based on the net asset value, buying and selling over the counter, and relatively small risks. They are particularly suitable for small and medium-sized investors to invest. The history of world fund development is the history of the transition from closed-end funds to open-end funds. Take the United States, which has the most mature fund market, as an example. In September 1990, there were 3,000 open-end funds in the United States with a total asset value of US$1 trillion; while there were only 250 closed-end funds with a total asset value of US$600. billion dollars. By 1996, the assets of open-end funds in the United States were US$3.5392 billion, and the assets of closed-end funds were only US$128.5 billion. The ratio between the two reached 27.54:1; in 1940, the ratio between the two was only 0.73 :1.

In Japan, before 1990, closed-end funds accounted for the vast majority, and open-end funds were in a subordinate position. However, the situation changed fundamentally after the 1990s, and the assets of open-end funds reached approximately twice those of closed-end funds. In countries and regions with early development investment funds in Asia, such as Hong Kong, Thailand, Taiwan, Singapore, and the Philippines, closed-end funds were mainly closed-end funds at the beginning of their development, and gradually transitioned to the current stage where the two types of fund forms coexist. From a global perspective, the net asset balance of the world's open-ended investment funds was US$2,355.4 billion in 1990, and by 1995 it had jumped to US$5,340.7 billion. Open-end funds have gradually become the mainstream of world investment funds. Most investment funds in various countries around the world were closed-ended when they started. This is because in the early stages of the development of investment funds, the handling fees for buying and selling closed-end funds were much lower than the handling fees for redeeming shares of open-end funds. From a fund management perspective, since there is no pressure to redeem beneficiary certificates, investors' funds can be fully utilized to implement their investment strategies to maximize profits. (2) Closed-end funds are trust funds, which refer to investment funds whose fund size is determined before issuance, remains fixed within a specified period after issuance, and is traded on the securities market. Since closed-end funds are traded on stock exchanges through bidding, the transaction price is affected by market supply and demand and does not necessarily reflect the net asset value of the fund. That is, the transaction price of closed-end funds is at a premium relative to its net asset value. , discount phenomenon. The practice of foreign closed-end funds shows that their transaction prices often fluctuate with price fluctuations of first premium and then discount. Judging from the operation of my country's closed-end funds, no matter how the fundamental situation changes, the trading price trend of my country's closed-end funds has never been able to break away from the price fluctuation pattern of first premium and then discount. (3) The relationship between open-end funds and closed-end funds. Open-end funds and closed-end funds constitute the two basic modes of operation of funds. Open-end funds refer to investment funds whose fund size is not fixed but can issue new shares or be redeemed by investors at any time based on market supply and demand. Closed-end funds, relative to open-end funds, refer to investment funds whose fund size is determined before issuance and remains fixed after issuance and within a specified period. Open-end funds are not listed and traded on exchanges. They are generally purchased and redeemed through agencies such as banks or direct sales centers. The size of the fund is not fixed. Fund units can be sold to investors at any time or bought back at the request of investors; there is no duration. In theory, it can exist forever; the price is determined by the net asset value. Closed-end funds have a fixed duration, during which the fund size is fixed. They are generally listed and traded on stock exchanges, and investors buy and sell fund units through the secondary market; they are not allowed to accept new shares or withdraw shares for a period of time until the new fund is established. A round of opening, when it is open, you can decide how much you propose or reinvest. Newcomers can also invest in shares at this time; the general opening time is 1 week and the closing time is 1 year; the price is determined by supply and demand, and the net value of the fund will affect the fund. Price, but the two are not unified. Usually closed-end funds trade at a discount. Open-end funds are one of the basic forms of fund operations in countries around the world. Fund management companies can sell new fund units to investors at any time, and they must also buy back the fund units they hold at any time at the request of investors. At present, open-end funds have become the mainstream variety in the international fund market. More than 90% of the fund markets in the United States, the United Kingdom, Hong Kong and Taiwan are open-end funds. (4) The difference between open-end funds and closed-end funds (1) The variability of fund size is different. Closed-end funds have a clear duration (in my country: no less than 5 years). Fund units that have been issued during this period cannot be redeemed. Although such funds can be expanded under special circumstances, the expansion should meet strict legal conditions. Therefore, under normal circumstances, the fund size is fixed. The fund units issued by open-end funds are redeemable, and investors can also subscribe for fund units at will during the duration of the fund, resulting in the total amount of funds in the fund constantly changing every day. In other words, it is always "open". This is the fundamental difference between closed-end funds and open-end funds. (2) Fund units are bought and sold in different ways. When a closed-end fund is initiated and established, investors can subscribe to the fund management company or sales agency; when the closed-end fund is listed for trading, investors can entrust securities firms to trade at market prices on the stock exchange. When investors invest in open-end funds, they can subscribe or redeem from the fund management company or sales agency at any time. (3) The buying and selling prices of fund units are formed in different ways. Since closed-end funds are listed on exchanges, their buying and selling prices are greatly affected by market supply and demand. When the market supply exceeds demand, the buying and selling price of fund units may be higher than the net asset value of each fund unit, and the fund assets owned by investors will increase; when the market supply exceeds demand, the fund price may be lower than the net asset value of each fund unit. Net Asset Value. The buying and selling price of open-end funds is calculated based on the net asset value of fund units, which can directly reflect the level of the net asset value of fund units.

In terms of fund trading fees, when investors buy and sell closed-end funds, just like buying and selling listed stocks, they also have to pay a certain proportion of securities transaction taxes and handling fees in addition to the price; while investors in open-end funds need to pay related fees (such as initial subscription fee, redemption fee) are included in the fund price. Generally speaking, the fees for buying and selling closed-end funds are higher than those for open-end funds. (4) The investment strategies of funds are different. Since closed-end funds cannot be redeemed at any time, all funds raised can be used for investment, so that fund management companies can formulate long-term investment strategies and achieve long-term operating performance. Open-end funds must retain a portion of cash so that investors can redeem them at any time, but cannot all use them for long-term investments, and generally invest in assets with strong liquidity.

Hedge Fund

The English name of hedge fund is Hedge Fund, which means "risk hedging fund". It originated in the United States in the early 1950s. The purpose of its operation at that time was to use futures, options, etc. Financial derivatives, actual buying and short selling of different related stocks, and risk hedging techniques can avoid and resolve investment risks to a certain extent. The world's first limited cooperative Jones hedge fund was born in 1949. Although hedge funds had appeared in the 1950s, they did not attract much attention in the next thirty years. It was not until the development of financial liberalization in the 1980s that hedge funds had broader investment opportunities and have since entered a stage of rapid development. In the 1990s, as the threat of world inflation gradually diminished and financial instruments became increasingly mature and diversified, hedge funds entered a stage of vigorous development. According to statistics from the British "Economist", more than 3,000 new hedge funds appeared in the United States and the United Kingdom from 1990 to 2000. After 2002, the rate of return of hedge funds has declined, but the scale of hedge funds is still large. According to a report by the British "Financial Times" on October 22, 2005, the total assets of global hedge funds have reached US$1.1 trillion so far.

QDII Fund

QDII is the acronym for Qualified Domestic Institutional Investor (Qualified Domestic Institutional Investor). It is a securities investment fund established within the territory of a country and approved by the relevant departments of that country to engage in securities business such as stocks and bonds in overseas securities markets. Like QFII (Qualified Foreign Institutional Investors), it is also a transitional institutional arrangement that allows domestic investors to invest in overseas securities markets to a limited extent when the currency is not fully convertible and the capital project is not yet open.

Index Fund

An index fund is a fund that constructs an investment portfolio based on the compilation principles of security price indexes for securities investment. Theoretically speaking, the operation method of index funds is simple. Just buy the corresponding proportion of securities according to the proportion of each security in the index and hold it for a long time. For a purely passively managed index fund, the fund turnover rate and transaction costs are relatively low, and the management fees tend to be minimal. This type of fund does not invest excessive amounts of money in specific securities or industries. It generally remains fully invested and does not speculate in the market. Of course, not all index funds strictly conform to these characteristics, and funds with different index properties will also adopt different investment strategies. Currently, there are three index funds: Xinghe, Pufeng, and Tianyuan, which are "optimized index funds" with the characteristics of index funds.

Traded open-end index fund

ETF is the English abbreviation of Exchange Traded Fund. The Chinese translation is "traded open-end index fund", also known as exchange-traded fund. ETF is an open-ended securities investment fund product listed and traded on an exchange. The trading procedures are exactly the same as stocks. The assets managed by ETFs are a basket of stock portfolios. The types of stocks in this portfolio are the same as the component stocks included in a specific index, such as the Shanghai Composite 50 Index. The number of each stock is consistent with the proportion of the constituent stocks of the index. ETF trading The price is determined by the value of the basket of shares it owns, known as the "unit fund net asset value." The investment portfolio of an ETF usually completely replicates the underlying index, and its net value performance is highly consistent with the specific index it is focused on. For example, the net value performance of the SSE 50 ETF is highly consistent with the rise and fall of the SSE 50 Index. SSE 50 ETF (510050) invests in the top 50 stocks in Shanghai Stock Exchange by market capitalization. Shanghai Stock Exchange Dividend ETF (510880) invests in the 50 stocks with the highest dividends on the Shanghai Stock Exchange. SSE 180 ETF (510180) invests in the 180 most representative stocks with good liquidity on the Shanghai Stock Exchange. If you want to keep pace with the stock market, it is recommended to buy SSE 180 ETF. Shenzhen Stock Exchange 100 ETF (159901) invests in the 100 most representative stocks with good liquidity on the Shenzhen Stock Exchange. Shenzhen Stock Exchange Small and Medium-sized Board ETF (159902) invests in the Shenzhen Stock Exchange Small and Medium-sized Board.

Warrant Funds

Warrant Funds: This type of fund mainly invests in warrants, based on the product characteristics of high leverage and high risk of warrants. , the fluctuation range of this type of fund is also larger than that of stock funds.

Corporate funds

Also called mutual funds, they refer to the fund itself as a joint-stock company, and the company raises funds by issuing stocks or beneficiary certificates. When investors purchase shares of a company, they become shareholders of the company, receive dividends or bonuses based on the shares, and share in the income from investment. Features 1. ***Similar to the fund, it is in the form of a joint-stock company, but it is different from ordinary joint-stock companies in that its business is focused on securities investment trusts. 2.***The capital of the same fund is the capital of the company's legal person, that is, shares. 3.***The structure of the fund is the same as that of a general joint-stock company, with a board of directors and a general meeting of shareholders. Fund assets are owned by the company, and investors are shareholders of the company and the ultimate holders of the company's assets. Shareholders exercise their rights at the shareholders' meeting according to the size of the shares they own. 4. According to the company's articles of association, the board of directors is responsible for the safe appreciation of fund assets. For the convenience of management, mutual funds often have fund managers and custodians. The fund manager is responsible for the investment management of fund assets, and the custodian is responsible for supervising the investment activities of the fund manager. The custodian can (but is not required to) open an account in a bank and register the fund assets in his own name. In order to clarify the rights and obligations of both parties, there is a contractual relationship between *** and the fund company and the custodian. The custodian's responsibilities are listed in the "custodian agreement" signed between *** and the fund company. If there is a problem with the ***tong fund, investors have the right to ask directly from the ***tong fund company.

Contractual funds

Also known as unit trust funds, they refer to specialized investment institutions (banks and enterprises) that jointly invest to form a fund management company, with the fund management company acting as the entruster People raise idle funds in society by issuing beneficiary certificates - "fund unit holding certificates" in the form of signing a "trust contract" with the trustee. Characteristics: A unit trust is a management company established by a document called a trust deed. In terms of organizational structure, it does not have a board of directors. The fund management company itself acts as the entrusting company to establish the fund, and it can itself or hire a manager to manage the fund's operations. and operations, and usually appoints a securities company or underwriting company to handle the issuance, sale, transfer, transaction, profit distribution, income and principal and interest repayment of beneficiary certificates - fund unit holding certificates. The trustee accepts the entrustment of the fund management company and registers and opens an account for the fund in the name of the trustee or trust company. The fund account is completely independent from the account of the fund custody company. Even if the fund custody company goes bankrupt due to poor management, its creditors cannot use the fund assets. Its responsibilities are to manage, keep and dispose of trust property, supervise the investment work of fund managers, ensure that fund managers comply with the investment regulations listed in the public prospectus, and ensure that the investment portfolios they adopt comply with the requirements of the trust contract. Trustees are responsible for claims from investors when something goes wrong with a unit trust fund.

Balanced Fund

Balanced Fund refers to the investment goal of not only obtaining current income but also pursuing long-term appreciation of fund assets. It invests funds diversified in stocks and bonds to ensure that Fund security and profitability. (Balance Fund) A mutual fund that diversifies investments into stocks and bonds. Usually, when fund managers are bearish about the market outlook, they will increase the proportion of investments in bonds that are more resistant to falling prices; when fund managers are optimistic about the market outlook, they will increase the proportion of investments in stocks, which have greater opportunities for capital gains. Balanced funds are funds that pursue both long-term capital appreciation and current income. This type of fund mainly invests in bonds, preferred stocks and some common stocks. These securities have a relatively stable proportion in the investment portfolio. Generally, 25%-50% of the total assets are used for preferred stocks and bonds, and the rest For investments in common stocks. Its risk and return profile is between growth funds and income funds. Types of balanced funds: Balanced funds can be roughly divided into two types: one is the stock-bond balanced fund, that is, the fund manager will promptly adjust the stock-bond allocation ratio according to market changes. When fund managers are optimistic about the stock market, they increase their stock positions, and when they believe there may be an adjustment in the stock market, they increase their bond allocation accordingly. Another type of balanced fund, while balancing stocks and bonds, puts more emphasis on dividends and pays more attention to pocketing money, which is also one of the ways to avoid risks. Take the Morgan Double Interest Balanced Fund as an example. The fund contract stipulates that when the realized income exceeds 1.5 times the bank's one-year time deposit interest rate (before tax), dividends must be distributed. Investors who prefer dividends may consider this type of fund. Advantages of balanced funds: In the three relatively volatile years of 2003, 2004, and 2005, data from Tianxiang Information shows that the average return rate of balanced funds in the A-share market was not lower than that of stock funds, or even higher than Equity fund returns. In addition, several market adjustments in the A-share market since this year show that the fluctuations of balanced funds are smaller than those of stock funds.

Looking at overseas long-term market performance, Morningstar statistics show that among various mutual funds in Asia, the total return of balanced funds in the past 10 years has far exceeded that of other types of funds, including stock funds. This proves that Balanced funds have stable investment capabilities in volatile market conditions. Therefore, for investors with low risk tolerance, balanced funds can be a key fund type to focus on in volatile markets. How to choose balanced funds? To choose a good balanced fund, you must first choose a trustworthy fund company. Comprehensive judgment can be made by comparing the performance level of the funds under each fund company, the stability of the fund manager, the strength of the investment research team, and the rating results provided by authoritative institutions. Star fund companies and five-star fund products rated by well-known evaluation agencies are better references.

Insurance Fund

Refers to a special fund established to compensate for economic losses caused by accidental disasters, or economic needs caused by personal casualties, loss of work ability, etc. In modern society, insurance funds generally take four forms: (1) Centralized national financial reserve fund. This fund is a monetary fund set up in the national budget, specifically used to deal with unexpected expenditures and special needs in the national economic plan, such as relief from natural disasters, invasion by foreign enemies, errors in national economic plans, etc. (2) Insurance funds of professional insurance organizations, that is, insurance funds raised by insurance companies and other insurance organizations by collecting insurance premiums, are used to compensate insurance units and individuals for losses caused by disasters or to pay insurance premiums when due. (3) Social security fund. As a national social policy, social security aims to provide citizens with a series of basic living security. Citizens have the right to receive material assistance from the state and society in the event of old age, illness, unemployment, disaster, or loss of work ability. Social security generally includes social insurance, social welfare and social assistance. (4) Self-insurance fund, that is, the economic unit raises its own insurance fund to compensate for losses caused by disasters and accidents. There are professional self-insurance companies abroad that raise funds on their own to compensate the losses of the parent company and its subsidiaries; my country has a "Safety Production Guarantee Fund", through the establishment of this fund, industry self-insurance is implemented, such as the "Safety Production Guarantee Fund" set up by China Petroleum and Chemical Corporation. The Production Guarantee Fund" is one such form.