Contract funds can be divided into two categories: closed and open.
Closed-end funds are relative to open-end funds. The so-called closed-end means that the total share of fund issuance has been determined before the sale, and it will neither increase nor decrease after the sale and within the specified duration. Investors who want to sell their own closed-end funds can only transfer their fund shares to others through the exchange, and cannot let the fund management company buy back the fund shares you want to sell. Therefore, for closed-end funds, the total fund share is fixed.
The total share of open-end funds is not fixed. When the market situation is good and the number of investors' purchases exceeds the number of redemptions, the total share of the fund will increase; When the market situation is not good and investors redeem the amount, the total share of the fund will decrease. Therefore, for open-end funds, the total fund share is changing. At present, China's securities investment funds are only contractual closed-end funds. I believe that in the near future, with the further development of China's securities market, development funds will become another good investment variety for investors.
According to the classification of investment objectives, securities investment funds are mainly divided into growth funds, income funds, balanced funds (mixed income and growth), index funds and theme funds. For the current domestic new funds, the five new funds of 1998 No.1 Wholesale Bank did not specify the specific types, but they are basically growth-oriented. Since 1999, various fund management companies have successively launched different types of new funds, such as balanced funds, growth funds, optimized index funds or index stock funds, special funds for SMEs or restructuring, and special funds for state-owned enterprises.
Growth funds mainly invests in the stocks of enterprises whose capital and income increase above the average speed, and fund managers emphasize seeking the maximum capital appreciation, rather than dividend income. This kind of fund has the best income, but the average risk is also the highest. When the general trend falls, its decline will generally exceed the decline of the whole market; When the general trend stopped falling and stabilized, its increase exceeded the average level. Therefore, this kind of fund is mainly favored by those investors with strong risk tolerance, but not suitable for those investors with fragile investment psychology.
The investment strategy of income fund is a unique value investment. Fund managers mainly pay attention to dividend income, and mainly invest in company stocks that can bring rich dividend income, such as public utilities, financial industry, natural resources industry and so on.
Theoretically, this kind of fund should be more stable than the market as a whole, and the stock investment method adopted is less risky.
Index fund refers to a fund that buys all or part of the stocks in the securities market according to the composition standard of the tracked index, and its goal is to obtain a return on investment roughly equivalent to the market average. The portfolio composition of purely passively managed index funds is completely consistent with the tracked index, including the stocks contained in the index and their weights to ensure that they will not be abandoned by the market. The optimized index fund buys the most representative stocks in the tracked index, and can partially adjust the portfolio with the trend of the tracked index. Through the organic combination of indexed investment and active investment, we strive to make the return rate of the fund exceed the growth rate of the index and seek long-term appreciation of the fund assets.
Balanced funds not only care about capital appreciation, but also care about dividend income, even consider future dividend growth, but they are most concerned about the potential of capital appreciation. This kind of fund invests in both growth stocks and income stocks with good dividend records. Its goal is to obtain dividend income, moderate capital appreciation and capital preservation, so that investors may obtain higher return on investment with relatively small risks. Its net value fluctuates smoothly, and its income and corresponding risk are between growth fund and indexed investment. Therefore, balanced funds are suitable for investors who want to obtain higher dividend income and more stability than growth funds, such as insurance funds and pension funds, and those relatively conservative individual investors.
Theme (special) funds refer to small and medium-sized funds that invest in specific types of stocks or securities. One of the reasons for setting up a special fund is that it is limited by the size of the fund, and the other is that the manager thinks that some specific types of securities have growth or special investment value.