There are many types of funds, and different ones can choose to invest in different fund products. In the fund market, the investment risks of LOF funds, ETF funds and index funds are different, which investors need to understand. Among them, LOF adopts a trading mechanism that pays equal attention to both on-site trading and off-site trading, providing investors with the net value of the fund and the on-site trading price that fluctuates around the net value of the fund.

Is the risk of LOF fund the same as that of ordinary fund?

LOF funds are more risky than ordinary funds, because there will be discount premium risk in LOF. A positive discount premium rate represents a premium and a negative discount rate represents a discount. When the market price of LOF is less than the net value of the fund, the discount is equivalent to LOF being sold at a discount in the market. When the market price of LOF is greater than the net value of the fund, the premium generated is equivalent to LOF being sold at a higher price in the market.

The differences between LOF funds and general funds are as follows:

1 investors can use the OTC trading of LOF funds for arbitrage, but ordinary funds cannot.

2of funds can be purchased and redeemed over the counter, or traded on the exchange. Ordinary OTC funds can only be purchased or redeemed in the OTC market.

In the secondary market, the general fund may provide a fund quotation every 15 seconds, while the LOF fund may provide a fund quotation every 1 day.

Generally speaking, when investing in LOF funds, users need to distinguish the difference between the products of this fund and other fund products. The advantage of LOF fund is that it can arbitrage on and off the market, that is, the price of LOF on the market is greater than that of LOF off the market, so it can be bought off the market and then sold in the market.