Due to legal restrictions, it is necessary to announce the purchase of more than 5% of a stock, so a single fund generally does not hold more than 5% of the stock.

However, if the shareholding share is too small, it will be difficult to control the stock trend and the risk of holding shares will increase sharply.

Therefore, different fund companies will hold a certain stock at the same time, resulting in a high degree of lock-in of stock shares and a sharp decline in fund risk.

This kind of behavior not only avoids the legal risk, but also greatly reduces the fund risk, which is called the fund group.