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What is a fund?
Fund is an indirect way of securities investment. By issuing fund shares, fund management companies concentrate investors' funds, which are managed by fund custodians (that is, qualified banks) and managed and used by fund managers. They engage in investment in financial instruments such as stocks and bonds, and then share the profits, and of course bear the investment risks. 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, and are generally purchased and redeemed by banks. The scale of the fund is not fixed, and the fund unit can sell it to investors at any time or buy it back at the request of investors. Whether at home or abroad, open-end funds have become the mainstream of the market. The main reason is that open-end funds provide investors with the convenience of subscription and redemption at any time, and the price is based on the net value of funds, which is relatively fair regardless of market supply and demand.

Open-end fund is relative to closed-end fund. The funds of closed-end funds are fixed, and investors may not redeem their investments at any time. Investors can only transfer their fund shares in the circulation market and cash them. Open-end fund means that when the fund is established, the total number of fund shares issued is not fixed, and it can be continuously issued according to the actual needs of business strategy. Investors can purchase fund shares at any time, and they can also ask fund managers to redeem their fund shares at any time. The price of subscription or redemption of fund shares is calculated according to the net asset value of the fund. Thus, free redemption is the most basic requirement of open-end funds.

Article 52 of the newly promulgated Securities Investment Fund Law stipulates: "Fund managers shall purchase and redeem fund shares every working day; If it is otherwise agreed in the fund contract, it shall be in accordance with its agreement. " Article 53 stipulates: "The fund manager shall pay the redemption money on time, except for the following circumstances: (1) The fund manager cannot pay the redemption money due to force majeure; (2) The stock exchange decided to suspend business according to law, which made it impossible for the fund manager to calculate the net asset value of the fund on that day; (3) Other circumstances stipulated in the fund contract. " Therefore, in addition to legal provisions, investors should also pay attention to the agreement in the fund contract.

In reality, the restriction on the redemption of open-end funds is mainly the restriction on the huge redemption. According to the provisions of the Pilot Measures for Open-end Securities Investment Funds, when the net redemption application of an open-end fund exceeds 10% of the total fund share, it will be regarded as a huge redemption. When a huge redemption application occurs, the fund manager can postpone the remaining redemption applications on the premise that the redemption ratio accepted on that day is not less than 10% of the total fund share. In other words, the fund manager can give redemption according to the situation, or refuse this part of redemption, and the rejected part can be postponed to the next open day, and the redemption amount can be calculated according to the net asset value of the fund on this open day. Of course, when there is a huge redemption and payment is delayed, the fund manager should inform the fund investors by mail, fax or other means specified in the prospectus within the time limit, explain the relevant handling methods, and make an announcement in the designated media and other relevant media. The longest notice and announcement time shall not exceed three securities trading days.

Closed-end funds have a fixed duration, and the fund size is fixed during the duration. Generally listed on the stock exchange, investors buy and sell fund shares through the secondary market.

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

-According to different investment risks and returns, it can be divided into growth funds, income-based funds and balanced funds. According to the definition of the newly promulgated Measures for the Operation of Funds, equity funds refer to funds in which more than 60% of fund assets are invested in stocks, bond funds refer to funds in which more than 80% of fund assets are invested in bonds, and money market funds refer to funds in which fund assets are only invested in money market instruments. Relatively speaking, stock funds have the highest risk, followed by bond funds, and money market funds have the lowest risk and the lowest return.

Growth funds's goal is to provide increasing opportunities for investors' funds for a long time, with relatively high returns and high risks. Income-oriented funds focus on bringing relatively stable returns to investors, with bonds and bills as the main investment targets, with low returns but little risk. Balanced funds are between growth and income, and invest their funds in stocks and bonds.

According to different investors, it can be divided into stock funds, bond funds, money market funds and futures funds. Generally speaking, the main difference is that securities investment funds are divided into closed-end funds and open-end funds according to trading methods, but most of them are open-end funds on the market now. According to the investment object, it can also be divided into stock funds, bond funds and money market funds.

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