What are the advantages of closed-end funds?
1, the investment strategy is more flexible. Closed-end funds can better make long-term investment plans, or invest in assets with low liquidity but high returns, such as long-term government bonds and growth stocks, because there is no need to worry about investors redeeming them at any time. This can improve the utilization rate of funds and increase the income potential.
2. Dividends are more favorable. Closed-end funds pay cash dividends. Although it can't be redeemed during the closed period, investors can also get cash flow income through dividends.
Which is better for open-end funds?
There is no absolute answer as to which is better, closed-end fund or open-end fund. Open-end fund refers to a fund that is not limited in scale when it is issued and investors can freely purchase and redeem it during the open period. Compared with closed-end funds, open-end funds have the following advantages:
1, with good fluidity. Investors are more flexible when purchasing and redeeming funds, and are not restricted by fund trading rules, which is convenient for investors to flexibly adjust their positions according to their own capital needs and market conditions. However, closed-end funds can not be redeemed freely before maturity, and the liquidity of funds is poor, which can not meet the capital turnover needs of investors.
2. The net value of the fund can better reflect the value. The price of an open-end fund is determined by its net value, which reflects the true value of the securities held by the fund. However, the price of closed-end funds is affected by market supply, and there may be a premium or discount.
3. The operation is convenient and simple. Open-end funds can be purchased and redeemed through mobile banking APP, fund company official website, Alipay and other online financial platforms.