As we all know, any investment tool has liquidity risk. So, what is liquidity risk? The so-called liquidity risk refers to the difficulty that investors face in realizing their investment and the risk that they cannot realize it at a suitable price when they need to sell their investment objects. Compared with stocks and closed-end funds, the liquidity risk of open-end funds is different. Under normal circumstances, the fund manager must undertake the redemption obligation based on the net asset value of the fund, and investors do not have the liquidity risk caused by not finding a buyer with a suitable price. However, when the fund is faced with great redemption pressure or the extreme situation of suspension of redemption, its fund investors can redeem the net asset value of the fund unit in full on that day. If investors choose to delay redemption, they will bear the risk of the net value of the subsequent redemption fund falling, which is the liquidity risk of open-end funds;

(2) Risks of unknown subscription and redemption prices:

Because China adopts the unknown price method, investors can't know what the net value of fund shares is on the day of purchase or redemption. At what price? This kind of risk is the unknown risk of the purchase or redemption price of open-end funds.

(3) Fund investment risk:

This kind of risk includes the investment risk of stocks and bonds. The investment risks of funds are different with different investment objectives. According to their own risk tolerance, investors can choose the fund varieties suitable for their own financial situation and investment objectives to invest.

(4) Institutional operational risk:

1。 System operation risk:

Risks to investors when the operating systems of all parties to the fund operation fail;

2。 Managing risks:

Risks brought to investors by the management level of all parties involved in fund operation;

3。 Operational risk:

Risks brought to investors by participants in fund operation due to their failure to fulfill their obligations; .

(5) Force majeure risk:

Refers to the risks brought to investors when force majeure factors such as war and natural disasters occur.

Credit risk: including the credit risk of bonds, bills and other instruments invested by the fund itself, as well as the door-to-door risk of investment based on transactions, such as repurchase agreements.

Market exposure risk: market exposure risk refers to the actual market value of money market funds, that is, the risk that the net value of funds valued by market method deviates from the transaction price of funds (usually the face value of funds).

Policy risk: Changes in national macro policies, such as fiscal policy, monetary policy, industrial policy, regional development policy, etc., lead to market price fluctuations, affect fund returns, and generate risks.

Economic cycle risk: With the cyclical change of economic operation, the income level of the securities market also changes periodically, and the income level of fund investment will also change accordingly, resulting in risks.

Interest rate risk: the fluctuation of interest rate in financial market will lead to the change of price and yield in securities market. Interest rate directly affects the price and yield of bonds and the financing cost and profit of enterprises. The fund invests in bonds and stocks, and its income level may be affected by changes in interest rates.

Operational risk of listed companies: The operational status of listed companies is influenced by many factors, such as management ability, industry competition, market prospect, technological update, financial status, new product research and development, etc. All these will lead to changes in the company's profits. If the listed company invested by the fund is not well managed, its share price may fall, or the profit available for distribution may decrease, thus reducing the investment income of the fund. Listed companies may also undergo unpredictable changes. Although the fund can disperse this unsystematic risk through diversification, it cannot be completely avoided.

Inflation risk: the purpose of fund investment is to preserve and increase the value of fund assets. If inflation occurs, the income of the fund's investment in securities may be offset by inflation, thus affecting the preservation and appreciation of the fund's assets.

Risk of bond yield curve change: the risk of bond yield curve change refers to the risk related to the non-parallel movement of yield curve, and a single duration indicator can not fully reflect the existence of this risk.

Reinvestment risk: the decline of market interest rate will affect the reinvestment rate of interest income of fixed-income securities, which is complementary to the price risk brought by interest rate increase.

Credit risk: during the transaction, the fund may default on delivery or the issuer of the bonds it invests in defaults and refuses to pay the due principal and interest, resulting in the loss of fund assets.

Management risk: the professional skills, research ability and investment management level of fund managers directly affect their information possession, analysis and judgment on the economic situation and the trend of securities prices, and then affect the investment income level of funds. At the same time, whether the fund manager's investment management system, risk management and internal control system are sound, whether it can effectively prevent compliance risks such as moral hazard, and the professional ethics level of the fund manager will also affect the risk-return level of the fund.

Liquidity risk: As a new transition market, China stock market has a high overall liquidity risk. The stocks and bonds in the fund portfolio will face high liquidity risk for various reasons, which will increase the difficulty of securities trading and increase the subscription cost or liquidation cost. In addition, the redemption demand of fund investors may lead to difficulties in fund position adjustment and asset realization, which will aggravate liquidity risk.

Operational and technical risks: During the operation of each business link, the related parties of the fund may have risks such as unauthorized trading, insider trading, trading errors and fraud caused by imperfect internal control or human factors. In addition, in the background operation of open-end funds, due to the failure or error of technical system, it may affect normal transactions and even affect the interests of fund share holders. This technical risk may come from fund managers, fund custodians, registration institutions, sales institutions, stock exchanges and securities registration and settlement institutions.

Compliance risk: refers to the risk of violating national laws and regulations or the relevant provisions of the fund contract during the fund management or operation.

Other risks: (1) risks arising from the imperfect system construction, staffing, risk management and internal control system brought about by the rapid development of fund business; (2) Risks that may be brought about by the financial market crisis and the pressure of industry competition; (3) Force majeure factors such as war and natural disasters may seriously affect the operation of the securities market and lead to the loss of fund assets; (4) Risks caused by other accidents.