Fund investment is becoming more and more popular now, and many investors hope to get some income through investment and financial management. The following is the basic knowledge of fund classification prepared by Bian Xiao for you. I hope it will help you!
What is a stock fund?
Equity investment includes: stocks, securities investment funds and partial stock funds. Only fixed-income funds are not equity funds, such as capital preservation funds, bond funds and money funds.
Stocks are equity commodities, and holding company stocks gives you the right to share the company's profits. Therefore, stock funds usually refer to funds that exist in the form of dividends and other investments.
In short, open-end funds that invest in bonds or monetary commodities are called fixed-income open-end funds, and open-end funds that mainly invest in securities are called stock-based open-end funds.
Why can't Class C funds be held for a long time?
Class C funds are not suitable for long-term holding, because class C funds charge sales service fees according to the holding time. The longer you hold the position, the higher the cost of holding the position. Therefore, for investors, Class C funds are more suitable for short-term investment.
What is the difference between the suffixes of the same fund, class A and class C?
The suffix of the same fund is divided into class A and class C, mainly stock funds or index funds. Different letter suffixes represent different charging methods.
These include:
Class A funds collect subscription fees on behalf of subscribers, and do not charge sales service fees during the holding period.
Class C funds do not charge subscription fees at the time of subscription, but charge sales service fees during the holding period.
Therefore, the initial cost of Class A funds is higher than that of Class C funds, but the cost of holding positions is lower than that of Class C funds.
Investors should decide whether to choose Class A funds or Class C funds according to their investment plans. If you plan to hold it for a long time, it is more cost-effective to choose a fund. On the contrary, it is more appropriate to choose class C funds.
What is the difference between suffixes A, B and C in the same fund?
The same fund is divided into three categories: A, B and C, mainly bond funds, and some stock funds or hybrid funds.
Class A funds charge fees on behalf of the front-end, subscription fees are charged at the time of subscription, and sales service fees are not charged during the holding period.
Class b funds charge on behalf of the back end. There is no charge at the time of subscription, and the fee is calculated according to the holding time at the time of redemption. The longer the holding time, the lower the charge, and there is no sales service charge during the holding period.
Class C funds do not charge subscription fees at the time of subscription, but charge sales service fees during the holding period.
Therefore, for this kind of fund classification,
If investors decide to hold it for a long time, they should choose Class B funds;
If short-term holdings are determined, Class C funds should be selected;
If the holding time cannot be determined, the cost of Class A funds is the most moderate.
What is the fund rating?
According to the historical performance of the fund in the market and taking into account the risk factors, the rating agencies divide the performance of the fund into five grades, which are assigned to AAAAA, AAAA, AAA, AA and A respectively.
Each institution has its own fund rating standards, and it is normal for the same fund to have a rating difference within one star at the same time.
Taking Morningstar as an example, briefly introduce the steps of fund rating:
1. First, classify the funds.
The risks and benefits of different types of funds are different. For the fairness of rating, funds are first classified according to the investment scope.
2. Measure the income of the fund.
Morningstar uses the monthly rate of return to measure the fund's income. The monthly rate of return reflects the income that investors get from holding funds in a specific month.
3. Calculate the risk-adjusted income of the fund.
Morningstar adjusts the fund's rate of return by "punishing risks"; The greater the fluctuation, the more punishment. It is equivalent to two funds with the same income, and the adjusted income with large fluctuations is lower.
4. According to the star level, it is divided into five stars.
According to the risk-adjusted income, the fund ranks from big to small: the former 10% was rated as 5 stars; The next 22.5% was rated as 4 stars; The middle 35% was rated as 3 stars; Then 22.5% was rated as 2 stars; Finally, 10% was rated as 1 star.
Through the steps of fund rating, it is obvious that fund rating is an upgraded version of fund ranking. Fund ranking is just a pure quantitative evaluation, which only uses the data of income, while fund rating considers factors such as fluctuation. Compared with fund ranking, fund rating pays more attention to long-term performance, uses richer and more comprehensive data, and the results are more objective and professional.