With the rapid development of China's economy, various wealth management products have also begun to develop rapidly, and funds are one of them. A fund refers to a certain amount of funds set up for a certain purpose. People who have just started investing in funds often see the publicity, introduction and classification of various funds, and they have fainted before buying them. In fact, before buying a fund, we should have a preliminary understanding of the fund and then choose to buy it.

Types of funds

There are many kinds of funds, which can be divided into different types according to their openness, strategies and targets. According to different investment objects, securities investment funds can be divided into: stock funds, bond funds, money market funds, hybrid funds and so on. If more than 60% of the fund's assets are invested in stocks, it is a stock fund; If more than 80% of the fund assets are invested in bonds, it is a bond fund; Money market funds that only invest in money market instruments; If it invests in stocks, bonds and money market instruments, and the ratio of stock investment to bond investment does not meet the requirements of bonds and stock funds, it is a mixed fund.

From the perspective of investment risk, there is no doubt that the risk of stock funds is the highest, the risk of money market funds is the smallest, and the risk of bond funds is in the middle. Due to different investment styles and strategies, the risks of the same type of investment funds will be different. For example, stock funds can be divided into: balanced, stable, exponential, growth and growth according to the degree of risk. Of course, the greater the risk, the higher the expected annualized expected rate of return; The risk is small, and the expected annualized expected return is correspondingly low.

Choose the right fund

Before buying a fund, you must first judge your risk tolerance. If you are unwilling to take too much risk, you can consider low-risk capital preservation funds and money funds; If the risk tolerance is strong, equity funds can be given priority. Equity funds are more suitable for young and middle-aged investors who have fixed income and like aggressive financial management. Risk-neutral people should buy balanced funds or index funds. Different from other funds, the investment structure of balanced funds is the balanced holding of stocks and bonds, which can ensure that the investment always runs in the middle and low risk range and achieve the investment purpose of expected annualized expected return and risk balance. People with poor risk tolerance should buy bond funds and money funds.

Then, consider the investment period. Try to avoid frequent purchase and redemption in the short term, so as not to cause unnecessary losses.

It is also necessary to know more about relevant fund management companies and investigate their investment style and performance. First of all, we can compare the expected annualized expected return of this fund with that of similar funds. Second, the expected annualized expected return of the fund can be compared with the market trend. Third, we can examine the cumulative net growth rate of the fund. Fund cumulative net growth rate = (cumulative net share-unit face value) unit face value. The cumulative net growth rate of the fund should also be linked to the length of the fund's operation. Fourth, when subscribing for a newly established fund, we can examine the situation of other funds managed by the same company.

At present, the expected annualized expected returns of funds purchased by many investors are generally not very good, but as investors themselves, they must be clear about their risk tolerance and not blindly listen to other people's propaganda. Be well prepared before you buy, know the information you need, and don't fight unprepared. Investment will be risky, and investors are advised to invest cautiously.