open-ended fund
Open-end fund is a kind of fund that can be bought and sold at any time without any restrictions. In open-end funds, investors can buy and sell their stocks during the open market, and they can buy and sell stocks at any time. Generally, open-end funds can include stocks, bonds, money markets and other assets. The advantage of open-end fund is that investors can buy or sell at any time according to market demand, and investors can gain more risk dispersion through smaller investment, thus reducing the overall risk.
However, open-end funds also have some disadvantages. Because it has no restrictions, it may be subject to a lot of speculation, which may lead to the risk of asset instability and loss. In addition, open-end funds usually have some management fees and handling fees, which will affect the investor's rate of return.
close-ended fund
Closed-end funds are funds with a specific term. Usually, after the fund is established, investors can't sell or buy for a certain period of time. This fund receives capital within a specific period of time and issues shares on a predetermined end date. Such funds usually include some illiquid assets, such as private equity and real estate.
The advantage of closed-end funds is that they are usually carried out through private financing, so the transaction cost and management cost of investors are usually relatively low. In addition, the liquidity of closed-end funds is poor, which can effectively avoid speculation and price fluctuations and improve the yield of investors.
However, when choosing a closed-end fund, investors need to understand its shortcomings. Closed-end funds usually have the problem of "moonlight clan", that is, the fund gets a lot of funds in the early stage, but operates when the funds are tight in the later stage. In addition, investors can't sell closed-end fund stocks before the deadline, and if they need to sell them in advance, they may have to pay a huge fine.
How to choose?
Investors need to consider many factors when choosing open-end and closed-end funds, including their own financial objectives, risk tolerance, liquidity and so on. Generally speaking, if investors want to make more profits for themselves in the market, they are more likely to choose open-end funds. On the other hand, if investors want to avoid risks and get more stable returns, closed-end funds may be more suitable.
In addition, investors also need to consider their own handling fees, transaction fees and management fees, as well as their own investment period. If investors need to get income in a short time, then open-end funds may be the best choice. If they have a long investment period, closed-end funds may be a better choice.
conclusion
To sum up, the choice of open-end and closed-end funds depends on investors' financial objectives, risk preference, asset liquidity and investment period. Investors should carefully evaluate these factors and make rational investment decisions. In stock market investment, only through long-term and stable investment can we bring the greatest guarantee for investors' stable income.