We often say that in investment, we should not put our eggs in one basket, but learn to allocate different assets to achieve the purpose of diversified investment. In fact, QDII funds can also be used as the target of our asset allocation and diversified investment.

The Concept of QDII Funds What is a QDII Fund?

The Chinese name for QDII is Qualified Domestic Institutional Investor, which refers to an institution that meets the conditions and is approved by the China Securities Regulatory Commission to raise funds domestically and reinvest in overseas stocks, bonds and other securities markets.

QDII funds operate differently from the public funds we usually trade in. QDII funds are generally issued by fund companies. After domestic investors subscribe or subscribe, they convert RMB funds into US dollars or other currencies and then invest in overseas markets.

What are the advantages of investing in QDII funds?

Investing in overseas assets through RMB QDII funds are purchased directly through RMB, just like we usually invest in other public funds. There is no need for exchange operations, which is very convenient and fast.

According to my country's foreign exchange control regulations: each person has a maximum exchange quota of US$50,000 per year. We can subscribe for QDII funds in RMB without occupying the personal exchange quota.

Diversified investment targets and diversified risks. Through QDII funds, we can invest in multiple overseas countries, effectively diversifying market risks and optimizing our asset allocation.

In addition to the advantages of the investment target itself, we can also use exchange rate arbitrage to invest in overseas markets by investing in QDII funds. If we encounter a depreciation of the RMB, we can increase the capital value of the funds and obtain the value of exchange rate conversion to achieve exchange rate arbitrage.

Effect.

What kind of risks are you likely to face when investing in QDII funds?

Exchange rate fluctuation risk The net value of QDII funds is announced in RMB, but it invests in overseas markets. Therefore, the net value of QDII funds will be affected by exchange rate fluctuations.

Changes in the exchange rate are a double-edged sword. If the RMB depreciates, you can obtain the value of exchange rate conversion through QDII funds and use exchange rate arbitrage. However, if the RMB appreciates, the capital value of the funds will also be weakened.

The utilization efficiency of funds is lower. Due to the impact of time differences, compared with ordinary domestic public funds, QDII funds take longer to apply for and redeem.

Generally speaking, the release time of the net value of QDII funds and the confirmation time of redemption and redemption are generally one working day longer, and the redemption arrival time is also several working days longer than that of ordinary domestic public funds. In this case, the funds are occupied

If the investment time is longer, the utilization efficiency of funds will be reduced, and some investment opportunities may be missed.

There may be different trading days. The trading days of the domestic market and the foreign market do not completely overlap. It may be a normal trading day domestically, while the foreign market is closed. However, the trading time of the QDII fund requires that both the domestic market and the overseas market involved in the investment are traded.

You can apply for redemption only on that day.

Quota-limited QDII funds require fund companies to apply for a QDII quota from the State Administration of Foreign Exchange and invest within the quota. If the fund company's quota is used up, the QDII fund may also suspend subscription. Generally, redemption is

It will not be suspended, and the specific trading rules shall be subject to the corresponding announcement.

Hope the above content is helpful to you.