First of all, the cost is low (the handling fee of lof fund on-site trading is very low, far lower than that of ordinary fund off-site subscription)
Secondly, there are arbitrage opportunities, and there is a price difference between the transaction price and the net value. If there is an opportunity, you can arbitrage.
Advantages and disadvantages of lof fund:
First, advantages:
1, lof funds can be traded on and off the market, and investors can use this feature to arbitrage.
2. Speed up the transaction, that is, lof has increased the on-site transaction of open-end funds, and the fund shares bought can be sold at t+ 1, and the sold fund funds can be used on the same day with reference to the settlement method of securities transactions, and t+ 1 can withdraw cash. Compared with over-the-counter trading, buying is 1 day earlier than subscription, and selling is 6 days earlier than redemption.
3. Reduce transaction costs, that is, investors can reduce transaction costs by trading funds in the secondary market. Generally speaking, the bilateral cost of buying and selling fund shares through exchanges is up to 0.5%.
Second, the shortcomings:
1 and lof have more varieties than exchange-traded funds, but they are still less than ordinary open-end funds. Therefore, for investors who need to invest in high-risk funds and low-risk funds at the same time, the existing lof funds still cannot fully meet their investment needs.
2. It is difficult for investors with little capital to achieve arbitrage.
I. Definition: fund, in English, broadly refers to a certain amount of funds set up for a certain purpose.
It mainly includes trust and investment funds, provident funds, insurance funds, retirement funds and funds of various foundations. From the accounting point of view, capital is a narrow concept, which refers to funds with specific purposes and uses. The fund we are talking about mainly refers to the securities investment fund.
Two. Classification: According to different standards, securities investment funds can be divided into different types:
(1) According to whether the fund unit can be increased or redeemed, it can be divided into open-end funds and closed-end funds. Open-end funds are not traded on the market (as the case may be), but are purchased and redeemed by banks, brokers and fund companies, and the fund scale is not fixed;
Closed-end funds have a fixed duration and are generally listed and traded on the stock exchange. Investors buy and sell fund shares through the secondary market.
(2) According to different organizational forms, it can be divided into corporate funds and contractual funds. A fund is established by issuing fund shares to establish an investment fund company, which is usually called a corporate fund; The establishment of fund managers, fund custodians and investors through fund contracts is usually called contractual funds. China's securities investment funds are all contractual funds.
(3) According to the different investment risks and returns, it can be divided into growth funds, income funds and balanced funds.
(4) According to different investors, it can be divided into four categories: money fund, bond fund, mixed fund and stock fund.
Third, the operation skills:
First, look at the market outlook before operating. The income from fund investment comes from the future. For example, if you want to redeem stock funds, you can first look at whether the future development of the stock market is a bull market or a bear market. Then decide whether to redeem or not, and make a choice on the timing.
If it is a bull market, it can be held for a period of time to maximize the benefits. If it is a bear market, redeem it in advance and put it in the bag.
Second, converting into other products and converting high-risk fund products into low-risk fund products is also a kind of redemption, such as converting stock funds into monetary funds.
This can reduce the cost, the conversion fee is generally lower than the redemption fee, while the money fund has low risk, equivalent to cash, and the income is higher than the current interest.
Therefore, conversion is also an idea of redemption.
Third, regular fixed redemption, like regular investment, can do daily cash management to stabilize market fluctuations. Fixed-term redemption is a redemption method of fixed-term investment.