Funds have broad and narrow definitions. Fund in a broad sense is the general name of institutional investors, including trust and investment funds, unit trust funds, provident funds, insurance funds, retirement funds and funds of various foundations. Funds in the existing securities market, including closed-end funds and open-end funds, have the characteristics of income function and value-added potential. From the accounting point of view, capital is a narrow concept, which refers to funds with specific purposes and uses. Because the investors of government agencies and institutions do not require investment returns and investment recovery, but require funds to be used for designated purposes in accordance with the law or the wishes of the investors, funds are formed.

The funds we are talking about now usually refer to securities investment funds.

▲ introduction

Securities investment fund refers to a collective investment method that collects the funds of many investors through the sale of fund shares to form independent assets, which are managed by fund custodians and fund managers and share the benefits and risks of securities investment in a combined way.

Securities investment fund is an indirect way of securities investment. By issuing fund shares, fund management companies concentrate investors' funds, which are managed by fund custodians (that is, qualified banks) and managed and used by fund managers to invest in financial instruments such as stocks and bonds, and then * * * bear the investment risks and share the benefits. According to different standards, securities investment funds can be divided into different types:

According to whether fund units can be increased or redeemed, they can be divided into open-end funds and closed-end funds. Open-end funds are not listed and traded, but are generally purchased and redeemed by banks, and the fund scale is not fixed; Closed-end funds have a fixed duration, and the fund size is fixed during the duration. Generally listed on the stock exchange, investors buy and sell fund shares through the secondary market.

Securities investment funds are called "mutual funds" in the United States, "unit trust funds" in Britain and China SAR, and "securities investment trust funds" in Japan and Taiwan Province Province.

Securities investment fund is a kind of collective investment and financial management method with shared interests and risks. That is, by issuing fund units, investors' funds are concentrated, managed by fund custodians (usually reputable banks), managed and used by fund managers (namely fund management companies), and invested in financial instruments such as stocks and bonds. While enjoying the income from securities investment, fund investors should also bear the risks brought by investment losses. The funds in China are all contract funds for the time being, which is a trust investment method.

▲ Features:

Like stocks, bonds, time deposits, foreign exchange and other investment tools, securities investment funds also provide investors with an investment channel. Then, what are the characteristics of securities investment funds compared with other investment tools?

(1) Integrated financial management and professional financial management.

The fund collects the funds of many investors and entrusts the fund managers to invest together, showing a feature of collective financial management. By pooling the funds of many investors, many a mickle makes a mickle, which is conducive to giving full play to the scale advantage of the fund and reducing the investment cost. The fund is managed and operated by the fund manager. Fund managers generally have a large number of professional investment and research personnel and a strong information network, which can better track and analyze the securities market comprehensively. Give funds to fund managers for management, so that small and medium investors can also enjoy professional investment management services.

(2) Portfolio investment spreads risks.

In order to reduce investment risks, China's Securities Investment Fund Law stipulates that funds must be invested and operated in the form of portfolio investment, thus making "portfolio investment and risk diversification" a major feature of funds. The scientific nature of "portfolio investment and risk diversification" has been proved by modern investment science. Because of the small amount of funds, small and medium-sized investors generally cannot diversify their investment risks by buying different stocks. Funds generally buy dozens or even hundreds of stocks. Investors buying funds are equivalent to buying a basket of stocks with very little money. The losses caused by the decline of some stocks can be made up by the rising profits of other stocks. Therefore, you can fully enjoy the benefits of portfolio investment and risk diversification.

(3) Enjoy the benefits and take risks.

Fund investors are the owners of funds. Fund investors * * * take risks * * and enjoy the benefits. The surplus after deducting the expenses borne by the fund from the investment income of the fund belongs to all fund investors and is distributed according to the proportion of fund shares held by each investor. Fund custodians and fund managers who provide services for the fund can only collect certain custody fees and management fees according to regulations, and do not participate in the distribution of fund income.

(4) Strict supervision and transparent information.

In order to effectively protect the interests of investors and enhance their confidence in fund investment, the China Securities Regulatory Commission has implemented strict supervision over the fund industry, severely cracked down on all kinds of behaviors that harm the interests of investors, and forced funds to make full information disclosure. In this case, strict supervision and information transparency have become the remarkable characteristics of the fund.

(5) Independent storage to ensure safety.

The fund manager is responsible for the investment operation of the fund and does not handle the custody of the fund property. The custody of the fund property is the responsibility of the fund custodian independent of the fund manager. This kind of checks and balances mechanism of mutual restriction and mutual supervision provides an important guarantee for the interests of investors.