Unsystematic risk: refers to the risk that only affects the securities of a certain industry or individual company. It is usually caused by a special factor, which has no systematic and comprehensive relationship with the price of the whole securities market, but only affects the expected annualized expected return of individual or a few securities. This change in securities price caused by the change of industry or enterprise's own factors is not necessarily related to the price of other securities and the expected annualized expected return, and will not affect the expected annualized expected return of other securities. This risk can be offset by diversifying investment. If investors hold diversified securities, when the price of some securities falls and the expected annualized expected return decreases, other securities may just rise in price and the expected annualized expected return increases, thus offsetting the risk. Nonsystematic risk can be offset or avoided, so it is also called distributable risk or avoidable risk. Non-systematic risks include credit risk, operational risk and financial risk.
1. Credit risk, also known as default risk, refers to the risk that investors will suffer losses due to the failure of the securities issuer to repay the principal and interest when the securities expire. If the securities issuer fails to pay the bond interest, preferred stock dividend or repay the principal, even if it only delays the payment, it will affect the interests of investors and make them lose the opportunity to reinvest and make profits and suffer losses.
2. Operational risk refers to the possibility that the company's decision makers and managers make mistakes in the management process, which leads to changes in the company's profitability, thus reducing the historical expected annualized expected return of investors.
3. Financial risk refers to the risk that the company's financial structure is unreasonable and financing is improper, which leads to the decline of investors' historical expected annualized expected returns. Debt management is an appropriate management strategy for modern enterprises. Debt management can make up for the shortage of its own funds, and can also use borrowed funds to achieve profitability. Especially for a special financial enterprise like a fund company, it is almost 100% in debt. Once the investment is wrong, it is very likely that financial risks will occur.
Generally speaking, the risk of principal loss of investment money funds is greater than that of capital preservation funds, because the latter has capital preservation. However, it should be noted that the capital preservation fund does not have unconditional capital preservation, but generally has a holding period, so investors can only enjoy capital preservation if they hold the fund for this investment period. Take the Southern Hedge Value-added Fund as an example. The fund is required to hold the fund for three years before it can enjoy the capital preservation clause, and early redemption cannot obtain the capital preservation.