I. Basic concepts
OTC funds, also known as "private equity funds", refer to the transactions between individuals and institutional investors that are not sold to the public. Unlike Public Offering of Fund, OTC funds do not need to raise funds publicly from securities regulators and investors, but directly provide fund shares to specific qualified investors for subscription.
Second, the investment threshold.
Due to the lack of public offering and publicity of OTC funds, the subscription threshold for investors is high. Under normal circumstances, the subscription of OTC funds needs to meet certain investment thresholds. For example, individuals must be high-income individuals or high-net-worth individuals, and institutions need to be qualified financial institutions.
Third, flexibility.
The high flexibility of OTC funds means that fund managers can concentrate on using their own investment strategies without being restricted by contracts. Therefore, fund managers can increase or decrease asset allocation according to market conditions in time to obtain better returns.
Four. Risk and reward
The natural advantage of OTC funds is high risk tolerance, so a large number of high-risk and high-return investment elites have been trained. However, due to certain obstacles in the development of OTC funds, investors need to choose stable fund managers and pay attention to diversifying investment risks.
To sum up, OTC funds, as a new investment method, have gradually attracted more attention. When choosing OTC funds, investors should strengthen their understanding of fund managers, pay attention to diversifying investment risks, take risks appropriately, and determine the investment threshold and investment ratio according to their own actual conditions.