First of all, whether it is a trust or a fund, if the project funds are in the equity market or the stock market, the most obvious feature of this kind of project is the fluctuation of income, and there will be the possibility of principal loss. In essence, the biggest risk is market risk, and the biggest uncertainty of profit and loss is market. Managers have professional ability, but the biggest difference is "following the trend". In this kind of projects, funds and trusts have more SPV (digging moral hazard-the risk of misappropriating funds). Compared with the above situation, trust is less prone to moral hazard.
Because the use and collection of trust funds are carried out under the supervision of the China Banking Regulatory Commission, the qualifications of trust companies are scarce, and the risk control measures such as mortgage pledge are strict. Therefore, the probability of moral hazard of issuers is low and the illegal cost is high. The funds referred to in this paper are usually contractual funds, that is, private equity funds. The issued fixed-income products are generally similar to trusts, and the risk control measures are similar to or even better than trusts. So it mainly involves moral hazard. Normal funds are looser than trusts, and self-regulatory supervision is the mainstay. If moral hazard is involved, if the product issuer has moral hazard prevention, the risk is similar to trust. Last year, the fund product problems of many institutions were mainly caused by moral hazard, such as misappropriation of funds.
Therefore, we should consider the ability and trust of the fund product or trust to the issuer. Try to choose large institutions with a long history or experience to organize closure and raise funds. As far as trust is concerned, the trust company shall not accept more than 200 trust contracts from customers, and the fund has no such strict requirements. Risk. The risk of trust is credit risk. Although the probability is low, it will be lost once it happens. The risk of fund is market risk, such as stock market and fluctuation risk. Both companies are formal and approved by the national regulatory authorities, and their products must be raised and operated in accordance with certain regulations. The key is: what is the quality of the underlying assets of product investment, and whether the risk measures such as guarantee, pledge and mortgage are effective? Investors need to do more research and screening.