After investors enter the fund market, they should analyze individual stocks, fund trends and fund companies, and choose their own businesses for investment. Especially for users who want to choose closed-end funds, it is very important to understand the advantages and disadvantages of closed-end funds. Only in this way can we cope with the situation after the fund rises and falls.

What are the advantages and disadvantages of closed-end funds?

Advantages of 1

Closed-end funds lock in funds for a long time, which can prevent investors from blindly operating frequently and effectively prevent investors from buying high and selling low. Moreover, there will be a phenomenon of discount and premium trading in the secondary market, which provides investors with the possibility of earning the difference.

In addition, the fund manager does not have to consider the redemption problem, and the funds can be fully utilized. At the same time, fund managers can be directly selected, which is suitable for individual investors who lack investment experience and investors who are easily affected by market fluctuations.

2 shortcomings

Closed-end funds have poor liquidity and cannot be purchased and redeemed at any time. Once a closed-end fund is bought, it cannot be redeemed during the closed period. In other words, closed-end funds can't be redeemed even if they go up, and they should be sold at a discount even if they are put on the market.

Most of the closed-end funds on the market now refer to funds that are closed for a certain period of time. If investors choose to invest in closed-end funds, they still need to know the pros and cons, so as not to cause greater losses because they don't know.