LOF is a listed open-end fund, which has the advantages of diverse trading venues, convenient and fast transactions, etc. So why do so few people buy LOF funds?

what is the reason?

Let us analyze it for you below: The reasons why so few people buy LOF funds are as follows: 1. The transaction risk of LOF funds is higher because LOF funds are medium- and high-risk financial products. Although the expected returns are high, the financial products with high expected returns are

Products tend to have higher risks, so if investors are prudent investors with low risk tolerance, they are not suitable for investing in LOF funds.

2. The number of funds is small and there are fewer options. The number of LOF trading products and funds is small. Although there are more types of listed open-end funds than those on general exchanges, they are still fewer than those of ordinary open-end funds.

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Perhaps these types are currently unable to meet the investment needs of investors, especially for those investors who like to invest in high-risk funds and low-risk funds at the same time, LOF funds cannot yet meet their needs.

3. Higher transaction fees: LOF funds have higher transaction fees, including subscription fees, redemption fees, operating fees (management fees, custody fees, sales service fees), etc.

The subscription fee is calculated based on the transaction amount. The larger the transaction amount, the smaller the subscription fee; the redemption fee is calculated based on the holding time of the fund. The longer the fund holding time, the lower the redemption fee, and the redemption fee may even be 0;

Operating fees will not be charged separately to investors, but will be accrued from daily fund assets and paid monthly.

4. Unable to make fixed investment in funds. Fixed investment in funds is a common investment method in the market. However, LOF funds require investors to actively operate during the transaction period, so they are not suitable for fixed investment in funds.

And there is a limit to the amount of a single transaction, no more or less.

5. Less share on the market. One of the reasons why LOF funds have less share on the market may be because it has investment threshold requirements, and its arbitrage operation is difficult and the opportunity to obtain additional income is difficult, so most investors will choose ETF fund transactions.

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6. The investment cost is high because the transactions of the LOF fund are too fast and convenient, which is a good thing. However, because the transactions are too frequent, and LOF fund transactions require a certain fee, the long-term accumulation will increase the investment cost.

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