Many investors believe that buying funds is just like buying financial management and bonds. They can continue to obtain expected investment returns over time, so they do not understand why funds rise and fall. In fact, funds have many similarities with financial products. However, funds are net value products, and the expected returns of the products can be directly reflected through the net value. Therefore, investors have a more obvious perception of rise and fall. So why do funds rise and fall?

Why funds rise and fall

1. The essence of funds. Funds are indirect investment products. When investors buy funds, they are actually entrusting the fund manager to invest on their behalf. For example, if an investor buys a stock fund, the specific stocks to invest in are determined and managed by the fund manager. This is also one of the main differences between funds and stocks and bonds. The latter two are direct investments. Which stocks or bonds to buy and how much to buy are all decided by the investors themselves.

2. The source of the expected return of the fund. From the nature of the fund, it can be seen that the source of the expected return of the fund is the expected return of the fund manager's investment. Funds can be divided into currency funds, bond funds, stock funds, hybrid funds, index funds and other categories according to different investment targets. Taking stock funds as an example, when investors buy stock funds, they do not mean to buy stocks directly, but it means that the fund mainly invests in stocks, and stock dividends, dividends, etc. are the main sources of expected income of the fund.

3. Why do funds rise and fall? Any investment is risky, and fund managers are no exception. The products they invest in may make profits or losses, which causes the fund's expected returns to rise or fall. For example, if market interest rates are high, bond prices will be low, and bond funds that buy bonds may also expect yields to fall or even lose money. I hope the above content on why funds rise and fall will be helpful to everyone. Warm reminder, financial management is risky, so investment needs to be cautious.