Basic concepts and types of funds

1. Basic concept of fund

The fund collects the funds of many investors and entrusts the fund managers to invest together, showing a feature of collective financial management. Can be understood as expert financial management.

2. What kind of fund?

Funds are generally divided into money funds, bond funds, mixed funds, partial stock funds, stock funds and index funds. Among them, partial stock funds can be classified as hybrid funds and index funds can be classified as stock funds. Because the investment direction is different, the income and risk are also different. Different funds have different returns, and the same kind of funds have different returns at different investment points.

3. The income risk characteristics of the fund

Generally speaking, in the long run, the order of yield from low to high is: money fund, bond fund, mixed fund, partial stock fund, stock fund and index fund. Investors should decide the investment type according to their risk tolerance and investment demand. For risk aversion, it is recommended to invest in risk-free money funds and bond funds with minimal risk. For those who pursue high returns, they can invest in stock funds or index funds, but they need to bear the corresponding high risks.