Collective financial management and professional management. The fund collects the funds of many investors and entrusts the fund manager to invest together. Pooling the funds of many investors is conducive to giving full play to the scale advantage of the fund and reducing the investment cost. The fund is managed and operated by the fund manager, who has a large number of professional investment and research personnel and a strong information network, and can better track and analyze the securities market comprehensively, and hand over the funds to the fund manager for management, so that small and medium investors can also enjoy professional investment management services.
Securities investment and risk diversification. Due to the small amount of funds, small and medium-sized investors generally cannot diversify their investment risks by buying different stocks. Funds generally buy dozens or even hundreds of stocks. Investors buying funds are equivalent to buying a basket of stocks with very little money. The losses caused by the decline of some stocks can be made up by the rising profits of other stocks.
Enjoy the benefits and take risks. Securities investment funds implement the principle of "sharing interests and risks". Fund investors are the owners of funds. The surplus after deducting the expenses borne by the fund from the investment income of the fund belongs to all fund investors and is distributed according to the proportion of fund shares held by each investor. Fund custodians and fund managers who provide services for the fund can only collect certain custody fees and management fees according to regulations, and do not participate in the distribution of fund income.
Strict supervision and transparent information. In order to effectively protect investors' interests and enhance investors' confidence in fund investment, fund regulators in various countries have strictly supervised the fund industry, severely cracked down on all kinds of behaviors that harm investors' interests, and forced funds to disclose more information.
Independent supervision and safety. The fund manager is responsible for the investment operation of the fund and does not handle the custody of the fund property. The custody of the fund property is the responsibility of the fund custodian independent of the fund manager. This kind of checks and balances mechanism of mutual restriction and mutual supervision provides an important guarantee for the interests of investors.