What are the advantages and disadvantages of lof fund?
Advantages of lof fund
1.lof funds can be traded on and off the market and can be used for fund arbitrage.
You can sell the fund shares on the first day to speed up the trading of this fund. If you refer to the settlement method of securities trading, the sold funds can be used on the same day, and 1 can be withdrawn on the same day. Compared with over-the-counter trading, buying is one day in advance and selling is redeemed up to six days in advance.
3. Reduce transaction costs. When investors trade, they can reduce the transaction cost through the trading funds in the secondary market. Generally speaking, the maximum bilateral cost of the fund when using the exchange is 0.5%.
Lof fund disadvantages:
1.lof has more varieties than exchange-traded funds, but it is still less than ordinary start-up funds. For investors who want to invest in high and low risk funds, the variety is not rich enough.
2. It is difficult for investors with small capital to achieve arbitrage.
After understanding the advantages and disadvantages of lof fund, let's take a look at how to choose lof fund.
Lof fund is a listed open-end fund, and investors can trade on or off the market. Investors can choose lof funds according to the following methods:
1. Operational capacity of the Fund
Investors can check the fund manager's ability to find funds when purchasing lof funds. In other words, the ability of fund managers is judged by their historical fund performance. Lof funds with higher fund managers' abilities are generally selected.
2. Trends of the Fund
Investors can also judge whether lof fund is worth buying according to its trend. If the trend of the fund has been in the upward channel, or supported by the support level below, the rebound begins to rise, and investors can choose to buy.
3. The trend of fund investment objectives
The target of lof fund investment also has a significant impact on its trend. Investors should choose lof funds with rising investment targets.
4. Historical performance of the Fund
The performance of lof fund is also the driving force to support its later rise. Investors can try to choose those lof funds with good historical performance.
The characteristics of lof fund are as follows:
1.LOF fund is still an open-end fund in essence, and its proportion in the whole fund is not fixed. Fund shares can be purchased and exchanged at the time and place agreed in the fund contract.
2. Combine the sales advantages of banks and other consignment agencies with the trading network of Shenzhen Stock Exchange and LOF fund sales. Banks and other consignment agencies still use the current platform for consignment, while the trading system of Shenzhen Stock Exchange adopts the popular online pricing and issuance method of new shares.
3. After being approved to be listed on the stock exchange, investors can choose to buy and sell fund shares in banks and other consignment agencies according to the net value of fund shares closed on the same day, or they can choose to buy and sell fund shares in the securities business department of member stock exchanges according to the transaction price.
4.LOF fund investors must go through certain custody transfer procedures if they want to buy funds at designated outlets and sell them online; Similarly, if you want to exchange the proportional funds bought on the exchange online at the designated outlets, you must also go through certain custody transfer procedures.
5. The procedures for purchasing and exchanging LOF funds in banks and other consignment agencies are the same as those for general open-end funds. The trading methods and procedures of listed open-end funds are basically the same as those of closed-end funds.