It is an indirect way to participate in innovation by buying new stock funds. Compared with individual participation in innovation, borrowing funds to participate in new shares has the following advantages:
1. The winning rate is relatively high: individual investors usually only have tens of thousands to hundreds of thousands of funds, which is a drop in the bucket compared with the huge amount of new funds that are frequently used for billions, resulting in a very low winning rate, which is as difficult as winning the lottery. However, new stock funds can spend hundreds of millions of funds to participate in the innovation, and the winning rate is greatly improved.
2. Low risk: individual investors bear the new risks alone, while participating in the new fund can share the benefits and share the risks with many investors. Moreover, for most funds that play new shares, the fund positions participating in new shares are only a small part of the total positions, and the risk can be reduced again through reasonable asset allocation.
3. More professional: the investment level of individual investors is generally not as good as that of professional investors, and the research on stock fundamentals and the collection and analysis of stock market information are also in a weak position. Most managers who play new stock funds have rich securities investment experience and information collection ability, and the research on new shares is higher than that of individual investors.