Fund is an asset management tool, which refers to an asset management plan in which a fund management company collects the funds of qualified investors, trades and manages stocks, bonds and other assets according to the established investment strategy, and achieves the goal of maximizing investment income by diversifying risks. There are many types of funds, and the domestic fund classification methods mainly include the following aspects:

1. Classification by investment objective

According to the different investment targets, funds can be divided into stock funds, bond funds, money funds, index funds, hybrid funds, QDII funds, ETFs and so on. Equity funds, also known as equity funds, mainly invest in the stock market, which is highly volatile, but in the long run, the average level of stock returns in the stock market is relatively high. Bond funds mainly invest in the bond market. Because the bond market fluctuates less and the risk is relatively low, it is suitable for conservative investors. Money funds mainly invest in the short-term money market, with low initial cost and strong liquidity, which is more suitable for investors with low risk requirements. Index fund is a passive management fund, which realizes income by tracking the stock market index. It is favored by investors because of its simple operation, low cost and high transparency. Hybrid funds generally have the advantages of stock funds and bond funds, and the balance between risk and income is better. ETF is short for exchange traded fund, similar to stock. It is listed and traded on the stock exchange. The constituent stocks come from a specific index, with relatively low commission and high flexibility.

2. Classification according to business scope

According to the different fund sales channels, funds can be divided into Public Offering of Fund and private equity funds. Public offering funds can raise funds to the public, which are issued by fund management companies supervised by the CSRC and can be purchased by all investors. However, private equity funds can only raise funds from a few investors, and they are not publicly raised. The threshold is high and there are legal framework restrictions.

3. According to the classification of fund management companies

There are many fund management companies with different strengths. According to the strength and risk-return level of the management company, funds can be divided into state-owned funds, private equity funds, foreign-funded funds and joint venture funds.

4. Other classification methods

There are other fund classification methods, such as according to the investment strategy of the fund, according to the investment cycle of the fund, according to the operation mode and so on.

Generally speaking, there are many types of funds, and investors need to choose according to their risk tolerance, investment experience and income expectation.