Some people say that funds are very similar to stocks and are called "quasi-stocks". However, there are many differences between them, mainly in the following aspects:
(1) permissions are different. Stock investors have certain direct management rights over stock issuing companies. However, there is no direct relationship between fund investors and fund investment objects, and they cannot interfere with their specific business activities.
(2) It has different reversibility. After the stock is issued, it can only circulate in the stock exchange market and be irreversibly returned to the company that issued the stock. Funds are just the opposite. Closed-end funds can be returned to the fund management company and its principal within a certain period of time after issuance. Open-end funds can return at any time.
(3) Different profit levels. Fund investment, like stock investment, can get dividends according to the actual performance of the investment object and make the dividends appreciate; But their profit levels and stability are different. The profit of stock investment comes from the level of price fluctuation in the secondary stock market, which is closely related to the operating conditions of stock issuing companies. Compared with investing in stocks, investors can get relatively stable returns every year according to their investment shares. However, the fund's profit is not as rich as that of stocks.
(4) There are different degrees of risks. Stock investment is influenced by the operating efficiency and market conditions of the invested company, and it is the most risky of all investment forms. In contrast, investment funds can avoid risks to the maximum extent by sharing them equally. Investing in stocks mainly means that investors directly deal with listed companies, and their profits and losses are directly related to investors' income. Investment funds are different. Investors entrust fund management companies to invest in stocks or other aspects, which can save transaction costs and improve investment returns.
Funds can often clearly tell investors where such funds will be invested, whether the income is more or less, and whether the risk is big or small. Investors can choose different kinds of funds according to their own desires, no matter how much income they want and how much risk they want to take.
Usually, when the fund is large, it can often reduce the investment risk by diversifying investment, and it can also obtain many preferential policies and transaction costs to reduce the transaction costs; When the fund is small, it can quickly switch from one investment to another, showing great flexibility. Smaller funds are often likely to buy shares of small companies with greater appreciation potential, thus obtaining greater return on investment.
Generally speaking, from the perspective of profitability, funds can be divided into the following three categories:
(1) growth funds pursues the maximization of capital gains. Such funds often invest in emerging industries or enterprises with broad development prospects. Generally, relatively more income can be obtained, but the income of such funds may be smaller in the current or short term.
(2) Income-oriented funds to ensure stable income. This kind of fund mainly invests in various securities that can bring stable current income. Generally, stable current income can be obtained with low risk.
(3) Income-balanced funds. This kind of fund mainly takes the stock of the company with stable income and long-term development prospects as the investment target. Usually, it can not only increase the current income, but also realize the long-term growth of capital income, and its risk is between the growth fund and the income fund.