Funds can be divided into broad and narrow senses. In a broad sense, funds are a collective term for institutional investors, including trust investment funds, unit trust funds, provident funds, insurance funds, retirement funds, and funds of various foundations.

Funds in the existing securities market, including closed-end funds and open-end funds, have the characteristics of income-generating functions and value-added potential.

From an accounting perspective, funds are a narrow concept, meaning funds with specific purposes and uses.

Funds are formed because investors from governments and public institutions do not require investment returns or investment recovery, but require funds to be used for designated purposes in accordance with legal provisions or the investor's wishes.

The funds we are talking about now usually refer to securities investment funds.