Many investors think that buying a fund, like buying wealth management and bonds, can get the expected return on investment over time, so they don't quite understand why the fund has gone up and down. In fact, there are many similarities between funds and wealth management products, but funds are net worth products, and the expected return of products can be directly expressed through net worth, so investors' perception of ups and downs is more obvious, so why do funds rise and fall?

Why do foundations go up and down?

1, fund essence

Funds are indirect investment products. When investors buy funds, they actually entrust fund managers to invest in these funds. For example, if an investor buys a stock fund, the specific stock to be invested is decided and managed by the fund manager.

This is also one of the main differences between funds and stocks and bonds. The latter two are direct investment. Which stock or bond to buy and how much to buy are up to investors.

2. Expected sources of income of the Fund.

According to the nature of the fund, the expected income source of the fund is the expected income of the fund manager. According to different investment targets, funds can be divided into money funds, bond funds, stock funds, hybrid funds and index funds.

Take stock funds as an example. Investors don't buy stocks directly, which means that the fund mainly invests in stocks, and stock dividends and dividends are the main expected income sources of the fund.

3. Why do foundations go up and down?

Any investment is risky, and fund managers are no exception. The products they invest in may be profitable or loss-making, which leads to the expected return of the fund rising and falling.

For example, if the market interest rate is high, the bond price will be low, and bond funds that buy bonds may also lose money or even lose money.