1. Essential difference
There are essential differences between stocks and funds, which can be seen from the following definitions of the two.
Funds compared with stocks usually refer to securities investment funds. It is a way of collective securities investment with shared interests and risks, that is, by issuing fund shares, investors' funds are concentrated, managed by fund custodians, managed and used by fund managers, and invested in financial instruments such as stocks and bonds. International experience shows that the fund has played a great role in guiding the transformation of savings funds into investment, stabilizing and activating the securities market, increasing the proportion of direct financing, improving the social security system and improving the financial structure. The development of China Securities Investment Fund also shows that the development of the fund has promoted the healthy and stable development of the securities market and the perfection of the financial system, and played an increasingly important role in the national economic and social development.
Stock is a kind of virtual capital. According to the viewpoint of economics, stock is the proof of ownership of buying and selling means of production. According to the common people, a stock is a capital ticket. Ordinary people can invest in one or several enterprises according to their own wishes in order to obtain the price difference of stock price fluctuation or the expected future income of enterprises. It can be seen that the stock is a certificate issued by a joint-stock company to shareholders as a certificate of investment and dividends. Stocks, like ordinary commodities, have a price, can be bought and sold, and can be used as collateral. Joint-stock companies raise funds by issuing shares. Investors get a certain dividend income by buying stocks. Stock has the characteristics of power and responsibility, indefinite period, liquidity, risk and legitimacy.
2. Operational differences
Simply put, stocks are speculation, that is, buying low and selling high to earn the difference. Of course, if you choose to hold it for a long time, it can also be considered as an investment, but it is difficult for most China investors to do this, and the fund is a long-term investment, because the short-term fluctuation of the fund is very small, and it is difficult to have a good return. If the fund is operated by speculating in stocks, it will be difficult to make good returns by paying a lot of subscription and redemption fees to banks and fund companies.
3. Risk differentiation
Stocks are risky, and so are funds.
Often we can think that the risk of stocks is higher than that of funds. This is related to the direct goal of both. Stock is one of the operating objects of the fund. Fund companies always have stable allocation items in asset allocation, such as bonds and bank deposits. The fluctuation of fund net value is usually closely related to the stocks purchased, especially the market of heavy stocks, but the fluctuation is definitely less than that of the corresponding stocks. Of course, funds are also divided into stock type, partial stock type, bond type, index type and mixed type, and the risks are different. If the stock type is more similar to the stock, the risk is greater; The type of index is closely related to the market trend of stocks and funds themselves; Bond-type usually has small net value fluctuation and small risk, but the income is correspondingly small. Usually the risk is high and the income is high; Low risk and good value preservation.
4. Other differences
According to the different purchase methods, funds can be divided into open-end funds and closed-end funds. Open-end funds are similar to insurance products, which can be sold through investment consultants of fund management companies or through bank agents. Closed-end funds are very similar to stocks and must be traded on exchanges (including online exchanges).
The implementation conditions of the two funds are different. The total circulation of shares is fixed. When trading, you must sell before you can buy, and you must buy before you can sell. This is a process of conditional implementation. Closed-end funds are similar to stocks. However, open-end funds are much more flexible, and their total issuance is not fixed, so investors can buy them at any time. This is the process of unconditional execution.