Advantages of open-end funds
Open-end funds include general open-end funds and special open-end funds. The special open-end fund is LOF, which is called "Listened Open-end Fund" or "open-endfunds" in English and "Listed Open-end Funds" in Chinese. In other words, after the issuance of listed open-end funds, investors can purchase and redeem fund shares at designated outlets, or buy and sell funds on exchanges.
Strong market selectivity.
If the performance of the fund is excellent, the capital flow of investors buying the fund will lead to the increase of the fund assets. However, if the fund is poorly managed, investors will withdraw funds by redeeming the fund, resulting in a decrease in fund assets. Because the overall operating cost of large-scale funds is not higher than that of small-scale funds, the performance of large-scale funds is better, more people are willing to buy, and the scale will be larger. This mechanism of survival of the fittest has formed a direct incentive and constraint for fund managers, which fully embodies a good market choice;
Good liquidity.
Fund managers must maintain sufficient liquidity of fund assets to cope with possible redemption, and will not concentrate on holding a large number of assets that are difficult to realize, thus reducing the liquidity risk of the fund;
High transparency.
In addition to the necessary information disclosure, open-end funds generally publish their net assets every day, which accurately reflects the ability of fund managers to operate and control funds in the market at any time, and is particularly attractive to small investors with insufficient ability, funds and experience;
Easy to invest.
It is very convenient for investors to purchase and redeem funds at all sales places at any time. A good incentive and restraint mechanism urges fund managers to pay more attention to integrity and reputation, emphasizing long-term, stable and excellent investment strategies and excellent customer service.