The fund mainly invests in a basket of stocks, and the rise and fall of the fund is determined by this basket of stocks. Invested stocks go up, funds go up, invested stocks go down and funds go down.
Funds are different from retail investors. Retail investors can short, but funds can't. The minimum position of stock funds is 80%. Even if the fund manager expects the stock market to fall, he can't avoid the risk by lightening his position.
Extended data
Fund collapse mainly includes two factors: market conditions and fund managers. The market is the main factor leading to the collapse of funds, and funds generally follow the stock market. When the stock market crashes, the probability of fund collapse is extremely high.
For fund managers, when there are some negative news from fund companies or fund managers, then the fund may be accompanied by a large number of redemptions, which will lead to a sharp decline in the fund.
Closed-end funds belong to trust funds, which refer to investment funds whose scale has been determined before issuance, fixed within a specified period after issuance and traded in the securities market.
Because closed-end funds are traded by bidding in securities trading, the transaction price is affected by the relationship between market supply and demand, which does not necessarily reflect the fund's net asset value, that is, the transaction price of closed-end funds has a premium and discount phenomenon relative to its net asset value. The practice of foreign closed-end funds shows that the transaction price often has the price fluctuation law of first premium and then discount. Judging from the operation of closed-end funds in China, no matter how the fundamental situation changes, the transaction price trend of closed-end funds in China has never deviated from the price fluctuation law of first premium and then discount.
Open-end funds and closed-end funds are isomorphic, forming two basic modes of fund operation.
Open-end fund refers to an investment fund whose scale is not fixed, but which can issue new shares or be redeemed by investors at any time according to market supply and demand. Closed-end fund is relative to open-end fund, which refers to the investment fund whose fund size has been determined before issuance and remains unchanged within the specified period after issuance.