Fund Dictionary Investment Fund In layman’s terms, an investment fund is a fund that collects funds from many dispersed investors and entrusts investment experts (such as fund managers) to conduct unified investment management according to their investment strategies to benefit many investors.

An investment vehicle.

Investment funds gather public funds to jointly share investment profits and risks. It is a collective investment method with maximum benefit sharing and maximum risk sharing.

Securities investment funds raise funds through the public issuance of fund units and use the funds for securities investment.

Holders of fund units enjoy asset ownership, income distribution rights, residual property disposal rights and other related rights to the fund, and assume corresponding obligations.

Simple chart of investment fund operation process Investment fund operation process: 1.

Investors' funds are pooled into funds; 2.

The fund entrusts investment experts - fund managers to invest and operate; among them, (1) investors, fund managers, and fund custodians establish trust agreements through fund contracts, establishing that investors contribute capital (and enjoy returns and bear risks), and the fund

There is a trust relationship between the manager who is entrusted with financial management and the fund custodian who is responsible for the custody of funds.

(2) The fund manager and the fund custodian (mainly banks) establish the responsibilities and rights of both parties through a custody agreement.

3.

Fund managers distribute investment income to investors through professional financial management.

In our country, the fund custodian must be a qualified commercial bank, and the fund manager must be a professional fund manager.

Fund investors enjoy the benefits of securities investment funds but also bear the risk of losses.

Contract funds and corporate funds Contract funds are relative to corporate funds.

Depending on the organizational form and legal status of the fund, there are basically two types of securities investment funds: contractual and corporate.

Contractual fund: Contractual fund, also known as trust investment fund, is an investment fund established by issuing beneficiary certificates based on a trust contract.

This type of fund generally enters into a trust contract between the fund manager, fund custodian and investors.

The fund manager can serve as the initiator of the fund and raise funds to form trust property by issuing beneficiary certificates. According to the trust contract, the fund custodian is responsible for the custody of the trust property and the specific handling of securities, cash management and related agency business; investment

The investor is also the holder of the beneficiary certificate. By purchasing the beneficiary certificate, he participates in fund investment and enjoys the investment benefits.

The beneficiary certificate issued by the fund indicates the investor's rights and interests in the investment fund.

Corporate funds: Corporate funds are established in accordance with company law and invest concentrated funds in various securities through the issuance of fund shares.

The organizational form of corporate investment funds is similar to that of a joint-stock company. The assets of the fund company are owned by investors (shareholders). The shareholders elect the board of directors, and the board of directors first appoints a fund manager, who is responsible for managing the fund business.

The establishment of corporate funds must be registered with the industrial and commercial administration department and the Securities and Exchange Commission, and must also be registered at the place where the stock is issued and traded.

The organizational structure of a corporate fund mainly includes the following parties: fund shareholders, fund companies, investment consultants or fund managers, fund custodians, fund conversion agents, and fund lead underwriters.

my country's current securities investment funds are all established as contractual funds.

Closed-end fund A closed-end fund means that the sponsor of the fund determines the total issuance amount in advance when establishing the fund. When more than 80% of the total amount is raised, the fund is declared established and closed, and no new investors will be accepted during the closed period.

invest.

For example, Kaiyuan (4688), a fund listed on the Shenzhen Stock Exchange, was established in 1998 with an issuance amount of 2 billion fund shares and a duration (closed period) of 15 years.

In other words, the Fund Kaiyuan has a 20-year operation period starting from 1998, with an operating quota of 2 billion. During this period, investors cannot request the return of funds, and the fund cannot add new shares.

Although investors are not allowed to request the return of funds during the closed period, the fund can be circulated in the market.

Investors can cash out through market transactions.

The circulation method of closed-end fund units in my country is to be listed and traded on the stock exchange. Investors who buy and sell fund units must conduct bidding transactions in the secondary market through securities firms.

(Note: The duration of the fund is the time from the establishment to the termination of the fund.) Open-end funds Open-end funds mean that the total amount of fund issuance is not fixed, and the total number of fund units increases or decreases at any time. Investors can increase or decrease in the fund according to the quotation of the fund.

A fund that subscribes or redeems fund units at a business location determined by the manager.

Open-end funds can be additionally issued according to the needs of investors, and can also be redeemed according to the requirements of investors.

For investors, they can either require the issuing institution to redeem the fund based on the current net asset value of the fund after deducting handling fees, or they can repurchase the fund and increase their holdings of fund units.