Equity funds mainly invest in stocks, with positions above 80%. Compared with direct investment in stocks, equity funds can invest in multiple stocks at the same time, thus spreading risks. Fund companies have professional research teams to conduct detailed research on listed companies, perfect decision-making processes to control investment risks, and fund managers have rich investment experience and can choose the most suitable one for us. Compared with individual investors, institutional investors have more resources and the risk of stepping on mines is relatively reduced.

According to the fund investment strategy, stock funds can be divided into value type, growth type and balance type. Value fund is what we usually call value investment, such as investment industry leader or listed company with good fundamentals, which pays dividends from the company's income. Relatively speaking, the risk is minimal and the income is low. Balanced funds, with moderate risks, mainly invest in stocks issued by companies with stable development prospects, and pursue stable dividends and capital gains. Growth funds, with great risks and high expected returns, mainly invests in ordinary stocks with growth potential and returns, with certain risks.

According to the fund management mode, stock funds can be divided into active management type and passive type (index type). Active funds generally refer to fund managers' stock selection and trading according to the external environment. Passive funds generally copy the trend of the index completely and do not need fund managers to choose stocks.

What are the characteristics of stock funds? Compared with other funds, equity funds have diversified investment targets and purposes. Compared with investors' direct investment in the stock market, equity funds have the characteristics of risk diversification and low cost. From the perspective of asset liquidity, equity funds have the characteristics of strong liquidity and high liquidity. For investors, equity funds operate stably and have considerable returns. Generally speaking, the risk of stock funds is lower than that of stock investment. So the income is relatively stable. Equity funds also have the function and characteristics of financing in the international market.