2. Fund is an investment tool. Securities investment funds collect the funds of many investors, which are managed by fund custodians (such as banks) and managed and used by professional fund management companies, and realize the purpose of income by investing in stocks, bonds and other securities.
The investments of all holders together constitute the assets of the fund, and the professional team of the fund management company uses the fund assets to buy stocks and bonds to form the investment portfolio of the fund. The fund shares held by individuals are the epitome of the above portfolio.
Expert financial management is an important feature of fund investment. Investment experts equipped by fund management companies generally have a profound theoretical foundation of investment analysis and rich practical experience, scientifically study financial products such as stocks and bonds, make portfolio investments, and avoid risks.
Accordingly, the fund management company will withdraw management fees from the fund assets every year to pay the company's operating costs. On the other hand, the fund custodian will also withdraw the custody fee from the fund assets. In addition, open-end fund holders need to pay the subscription fee, redemption fee and conversion fee directly. Closed-end fund holders should pay trading commissions when buying and selling fund shares.