Basic knowledge about funds 1. What is a securities investment fund?

In layman's terms, a securities investment fund is an investment tool that collects funds from many investors and gives them to banks for safekeeping. Professional fund management companies are responsible for investing in securities such as stocks and bonds to achieve the purpose of maintaining and increasing value.

2. How are securities investment funds classified?

According to whether the fund size can change at any time, it can be divided into open-end funds and closed-end funds.

According to different asset allocation ratios, they can be divided into money market funds, bond funds, stock funds, balanced funds and capital guaranteed funds.

3. What is a closed fund?

What is an open-end fund?

Closed-end funds refer to funds in which the total issuance amount is determined in advance, the total fund size remains unchanged, and investors transfer and trade through the securities market (usually an exchange) after the fund is listed.

Open-end funds are funds whose total amount of issuance is not fixed, whose active size increases or decreases at any time, and investors can subscribe and redeem according to the net value of the fund at business locations specified by the state.

4. What are the differences between open-end funds and closed-end funds: ◎Different fund sizes and renewal periods. Since investors can subscribe and redeem open-end funds at any time, the fund size is not fixed and the renewal period is not set.

Closed-end funds have a fixed size and a renewal period.

◎Different buying and selling methods: Open-end funds are similar to insurance products and can be sold through investment consultants of fund management companies or through bank agents.

Closed-end funds are similar to stocks and trade on exchanges.

◎Different pricing methods. Although the value of both is calculated based on the net asset value of the fund unit, the price of the open-end fund is strictly calculated based on the net asset value of the unit, while the transaction price of the closed-end fund will be affected by constant supply and demand factors. Therefore, the price of the open-end fund is calculated based on the net asset value of the unit.

There will be discounts and premiums.

5. What are the advantages of open-end funds over closed-end funds?

Compared with closed-end funds, open-end funds have the following advantages: ◎High transparency. Open-end funds disclose the net asset value of fund units every day, accurately reflecting the true value of fund operations.

◎Good liquidity: Investors can subscribe and redeem at any time according to the net asset value of fund units, avoiding the risk of discount.

On the other hand, in order to meet the redemption needs of investors, fund managers will not hold assets that are difficult to liquidate, making the portfolio more liquid than closed-end funds.

◎Better customer service After investing in open-end funds, you can enjoy a series of services from fund companies or agents, such as account inquiries and financial consultation, which are not available in closed-end funds.

6. What is a growth fund?

What are value funds?

The investment style of growth funds aims to select companies with better-than-average earnings growth and the potential to add value.

The focus of the growth model is not on the current price of the stock, but on the expectation that future stock price performance will be better than the market average.

The investment style of value funds aims to buy stocks whose prices appear low relative to their intrinsic value, with the expectation that the stock price will return to its reasonable level.

7. What is an index fund?

What are enhanced index funds?

◎Index funds are a type of fund that are based on the principle of fitting the target index and tracking changes in the target index to achieve synchronized growth with the market.

The investment of index funds adopts an investment strategy that fits the return rate of the target index, diversifying the investment in the component stocks of the target index, and strives to make the return rate of the stock portfolio fit the average return rate of the capital market represented by the target index.

◎Enhanced index funds refer to the optimization and balance of investment risks and returns through the organic combination of index investment and active investment, striving to achieve investment returns that exceed the market and achieve long-term stable appreciation of fund assets.

8. What is an income fund?

What is a balanced fund?

◎Income funds are funds whose investment objectives are to pursue the current income of the fund. Their investment targets are mainly blue chip stocks, bonds and other securities with good historical dividend records.

Income funds generally distribute the interest and dividends earned to investors.

◎Balanced funds are funds that pursue both long-term capital appreciation and current income. These funds mainly invest in bonds, preferred stocks and some common stocks. These securities have a relatively stable proportion in the investment portfolio, usually

Invest 25% to 50% of total assets in bonds and the remainder in common stocks.

Its risk and return profile is between growth funds and income funds.

9. What are stock funds, bond funds, money market funds, and other fund types?

According to different investment objects, securities investment funds can be divided into stock funds, bond funds, money market funds, futures funds, option funds, index funds and warrant funds, etc.