the fund loses the principal at most, and there will be no situation of continuing to lose money or owing money after the loss, and the probability of the fund losing all of it is extremely small. If the fund continues to lose money, it may trigger the risk of liquidation, and the remaining assets will be distributed to investors in proportion after the liquidation of the fund.

The fund mainly invests in a basket of stocks, and the profit and loss of the fund are determined by this basket of stocks, and the fund is managed by a professional fund manager, so the probability of all losses is small.

Stock funds are the main types of investment funds that invest in stocks. The main function of stock funds is to concentrate the small investments of mass investors into large funds. Investing in different stock portfolios is the main institutional investor in the stock market.

Classification

(1) Stock funds can be divided into preferred stock funds and common stock funds according to the investment objects. Preferred stock funds can obtain stable income with less risk, and the income distribution is mainly dividends; Common stock fund is the largest fund, which aims at pursuing capital gains and long-term capital appreciation, and the risk is greater than that of preferred stock fund.

(2) According to the degree of diversification of fund investment, stock funds can be divided into general common stock funds and specialized funds. The former refers to the diversification of fund assets into various common stocks, while the latter refers to the investment of fund assets in some special industry stocks, which is risky but may have better potential returns.

(3) According to the purpose of fund investment, stock funds can also be divided into capital appreciation funds, growth funds funds and income-based funds. The main purpose of capital appreciation fund investment is to pursue rapid capital growth, so as to bring capital appreciation. This kind of fund has high risks and high returns. It is risky for growth funds to invest in ordinary stocks that have growth potential and can bring income. Stock income funds invest in stocks issued by companies with stable development prospects, and pursue stable dividend distribution and capital gains. Such funds have little risk and low income.

Money market fund refers to a fund that invests in short-term securities in the money market. The fund's assets are mainly invested in short-term monetary instruments such as treasury bills, commercial paper, bank time deposit certificates, government short-term bonds, corporate bonds and other short-term securities.

bond funds, as the name implies, are * * * mutual funds with bonds as their main investment targets. Besides bonds, they can also invest in financial bonds, bond repurchase, fixed deposits, short-term bills, etc. Most of them are issued in the form of open-end funds, and they are legally tax-saving. Most domestic bond funds tend to be income-oriented bond funds, mainly to obtain stable interest, so the income generally shows steady growth.