As the name implies, fund purchase restriction means that a single account can only purchase a limited number of fund shares, or even suspend subscription. Public Offering of Fund's main profit sources include fund transaction costs, such as subscription fees and redemption fees, and fund management fees. Generally speaking, the larger the fund, the more frequent the transactions, and the more profits the fund company will make. Then why do fund companies want to limit purchases?

1, protecting the interests of investors

In fact, buying a fund is to hand over the funds to the fund manager for management and investment, but it takes a while for the fund manager to open a position.

If a fund is sought after by the market, a large number of investors and subscription funds will flood into the investment layout of fund managers in a short time. Before these funds are effectively opened, large subscription will dilute the income of the original holders.

2. It is convenient for fund managers to operate.

The larger the fund scale, the higher the requirements for fund managers to change positions and hold shares. If the fund scale suddenly increases, the fund manager may not have enough experience and ability to track so many stocks at the same time, resulting in passive investment strategy.

3. Restrictions on foreign exchange quota of 3.QDII funds

QDII funds often announce suspension or restriction of subscription, because QDII funds need to invest in foreign currency. If the foreign exchange quota is insufficient, they can only suspend subscription or purchase restriction.

4. Other reasons

Recently, affected by the collapse of crude oil prices and the spread of COVID-19 epidemic abroad, the stock market is bleak, and many safe-haven funds have flowed into the bond market, resulting in a sharp drop in bond yields. It is difficult for fund managers to find a suitable bond allocation, so many bond funds have suspended large-scale subscription recently.