1. What does the umbrella fund mean?
The so-called umbrella fund is actually an organizational structure of open-end fund; Under this organizational structure, the fund sponsors initiated the establishment of a number of funds that can only be converted according to the prescribed procedures according to a general fund prospectus. These funds are called sub-funds or constituent funds. The fund system composed of these sub-funds is called umbrella fund. Furthermore, umbrella fund is not a specific fund, but a management method of many funds initiated and managed by the same fund sponsor.
2. What are the characteristics of umbrella fund?
1, the management fee charged is relatively low. Because the sub-funds under the umbrella fund operate within the same management framework, it better highlights the characteristics of large scale, complete varieties and unified management of the fund, which makes the umbrella fund enjoy economic advantages in custody, audit, legal services and management fees, reduces management costs and broadens the downward space for the fund to collect management fees.
2. Investors can easily switch between sub-funds under umbrella funds: umbrella funds can provide investors with a variety of investment options, and investors can easily choose and switch different sub-funds according to changes in market conditions and the operational performance of each sub-fund.
3. The switching cost between sub-funds is low. The conversion between single funds usually takes at least one week from applying for "endorsement" on the unit warrant to receiving the redemption money, and it takes a considerable initial subscription fee to convert into a new fund; Investors of umbrella funds can switch fund types at any time according to their own needs, which has the characteristics of short time and low switching cost.
4. Umbrella funds help fund management companies stabilize customers and reduce redemption pressure.