With the development of society, people are now becoming more and more aware of investment and financial management. The first choice for many people who are new to investing is to buy funds, because fund management does not require you to know how to manage your own funds. Professional fund managers will operate the funds. Although it is said not to do it yourself, choosing the right fund is the key. Today, the editor will introduce to you the basic knowledge of getting started with funds.

How to choose the right fund?

To choose a suitable fund, you should first learn to judge whether a fund meets your investment goals through 6 fund common sense.

1. Net value of the fund

The net value of the day: represents the amount of money corresponding to each share of the fund.

Cumulative net value: refers to the sum of the fund’s net value and its dividend performance since its establishment.

The cumulative net value reflects the cumulative expected annualized expected return of the fund since its establishment. To a certain extent, it can be combined with the length of the fund's establishment to reflect the historical performance of the fund.

2. Fund dividends

Fund dividends refer to the fund distributing part of the expected annualized expected income to investors in the form of cash. This part of the expected annualized expected income was originally the fund unit part of the net worth. Fund dividends generally come in two forms: cash dividends and dividend reinvestment. Generally, cash dividends default if not specified by the investor.

3. Fund positions

Through fund positions, you can see whether the stocks that are key positions in a fund are industries you are optimistic about.

4. Changes in scale

Whether the fund size keeps growing is a good thing, it must be viewed in conjunction with changes in the fund's net value. If the fund size is increasing and the net value generally continues to rise steadily, it means that the fund is performing well. If the scale is too small, the fund will be vulnerable to subscription and redemption.

5. Holder structure

The proportion of institutional holders of high-quality funds is much higher than that of low-quality funds. The proportion of institutional holders reflects the recognition of the fund by institutional investors. A high proportion of institutional holders indicates that the fund is favored by many fund investors. Therefore, the proportion of institutional shareholders can be used as one of the factors to judge the reliability of a fund.

6. Purchase information

Purchase-related information, including various rates, subscription starting points, and fixed investment starting points, all need to be read clearly before purchasing.