There are broad and narrow definitions of funds. In a broad sense, funds are the collective names of institutional investors, including trust and investment funds, unit trust funds, provident funds, insurance funds, retirement funds and funds of various foundations. In the existing securities market, funds, including closed-end funds and open-end funds, have the characteristics of profitability and shallow value-added From the perspective of accounting, fund is a narrow concept, which means funds with specific purposes and uses. Because the investors of the government and institutions do not require investment returns and investment recovery, but require the funds to be used for designated purposes according to the law or the wishes of the investors, funds are formed.

The fund we are talking about now usually refers to the securities investment fund

The securities investment fund is an indirect way of securities investment. By issuing fund units, fund management companies concentrate investors' funds, which are managed by fund custodians (that is, qualified banks), managed and used by fund managers to invest in financial instruments such as stocks and bonds, and then * * * bear the investment risks and share the benefits. According to different standards, securities investment funds can be divided into different types:

-according to whether the fund units can be increased or redeemed, they can be divided into open-end funds and closed-end funds. Open-end funds are not listed and traded, but are generally purchased and redeemed by banks, and the fund scale is not fixed; Closed-end funds have a fixed duration, during which the fund scale is fixed. Generally, they are listed and traded on the stock exchange, and investors buy and sell fund units through the secondary market.

—— According to different organizational forms, it can be divided into corporate funds and contractual funds. Funds are established by issuing fund shares to establish investment fund companies, which are usually called corporate funds; Fund managers, fund custodians and investors are established through fund contracts, which are usually called contractual funds. At present, China's securities investment funds are all contractual funds.

—— According to the difference of investment risks and returns, it can be divided into growth funds, income funds and balanced funds.

-according to the different investment objects, it can be divided into stock funds, bond funds, money market funds, futures funds, etc.

Of course, there are risks in investing in funds, but the risks are much smaller than buying stocks directly, because there are many stocks invested by funds, which spread the risks. If they are money funds or short-term debt funds, there is basically no risk.