I think the advantages of this kind of fund can be summarized as follows: fixed scale, long closed period, good investment layout and good return expectation.

Everything has two sides, so do closed-end funds. The closure period is as short as 3 or 5 years and as long as 10 year. Although the flexibility of funds has been lost, the investment layout is relatively locked. Fund managers do not have to worry about investors redeeming at any time. They can safely choose some stocks, such as large-cap blue chips, and expect returns according to the stability and good performance of the companies corresponding to blue chips. If the market is good and operates well, it is still possible to achieve a good net growth. So on the whole, its defense ability is strong.

Another advantage is the low subscription fee. The transaction cost of the securities market is only three thousandths, while the open-end fund is higher, usually as high as 1.2%.

It is not difficult to see that this kind of fund is suitable for investors who have idle funds that are not used for a short period of time. If they are too lazy to manage the funds at ordinary times, they can allocate them appropriately.

Second, the shortcomings of closed-end funds

Compared with open-end funds, closed-end funds have obvious shortcomings.

1, the term is too long.

In my opinion, there are too many places for young people to spend money. It is common to spend a lot of money on buying a house and a car. A sum of money closed for several years, there must be limitations. I once bought a three-year national debt, which will expire in more than half a year. As a result, it had to be redeemed in advance, and the yield was definitely not as good as expected.

For closed-end funds, if they want to be redeemed in advance, they can only be traded and transferred at the market price as in the stock market. Although there will be a net reference, it will be discounted.

2. The transaction is not flexible enough

Open-end funds can be redeemed almost at any time, and only need to pay a certain redemption fee. Closed-end funds can only be redeemed at maturity or transferred at a discount in advance, and can be traded in the stock market. However, compared with open-end funds, their transactions are not flexible enough.

3. Insufficient incentives for fund managers.

As mentioned above, closed-end funds have a fixed issuance scale and a long term, so fund managers can set their minds at ease without worrying about investors' redemption at any time, but this may have little incentive for fund managers. For open-end funds, fund managers should set aside some funds to deal with investors' redemption at any time, and the utilization rate of funds is poor, so they can only use limited funds to obtain higher returns as much as possible, so fund managers are more active and usually have better performance returns.