Stock funds: Funds that mainly invest in stocks, and their stock investment accounts for ≥60% of the net asset value. Contract funds: Also known as trust investment funds, they are investment funds established by issuing benefit certificates based on trust contracts.

This type of fund generally enters into a trust contract between the fund manager, fund custodian and investors.

The fund manager can serve as the initiator of the fund and raise funds to form trust property by issuing beneficiary certificates. According to the trust contract, the fund custodian is responsible for the custody of the trust property and the specific handling of securities, cash management and related agency business; investment

The investor is also the holder of the beneficiary certificate. By purchasing the beneficiary certificate, he participates in fund investment and enjoys the investment benefits.

The beneficiary certificate issued by the fund indicates the investor's rights and interests in the investment fund.

Open-end funds are one of the basic forms of fund operations around the world.

Fund management companies can sell new fund units to investors at any time, and they must also buy back the fund units they hold at any time at the request of investors.

The main differences between open-end funds and closed-end funds are: (1) The fund size is not fixed.

Closed-end funds have a fixed duration, during which the fund size is fixed.

Open-end funds have no fixed duration, and their scale can change at any time due to investors' subscriptions and redemptions; (2) They are not listed for trading.

Closed-end funds are listed and traded on securities exchanges, while open-end funds are sold and redeemed at the business premises of the sales agency and are not listed and traded; (3) The price is determined by the net value.

The subscription and redemption prices of open-end funds are calculated based on the daily announced net asset value of the fund unit plus or minus a certain handling fee, which can clearly reflect its investment value, while the transaction price of closed-end funds is mainly affected by the market's response to specific fund units.

The impact of supply and demand; (4) High management requirements.

Open-end funds face redemption pressure at any time and must pay more attention to liquidity and other risk management, requiring fund managers to have higher investment management levels.

The development process of world investment funds basically follows the development law from closed to open.

At present, open-end funds have become the mainstream variety in the international fund market. More than 90% of the fund markets in the United States, the United Kingdom, Hong Kong and Taiwan are open-end funds.

Compared with closed-end funds, open-end funds have greater advantages in terms of incentive and restraint mechanisms, liquidity, transparency and investment convenience: (1) Strong market selectivity.

If the fund performs well, the inflow of funds from investors purchasing the fund will lead to an increase in fund assets.

And if the fund does not perform well, investors will withdraw their funds by redeeming the fund, resulting in a reduction in fund assets.

Since the overall operating costs of larger funds are no higher than those of small funds, large funds have better performance, more people are willing to buy them, and the scale is larger.

This survival of the fittest mechanism forms direct incentives and constraints for fund managers, fully embodying good market choices.

(2) Good liquidity.

Fund managers must maintain sufficient liquidity of fund assets to cope with possible redemptions without concentrating on holding large amounts of assets that are difficult to liquidate, thereby reducing the fund's liquidity risk.

(3) High transparency.

In addition to performing necessary information disclosures, open-end funds generally publish net asset values ??on a daily basis, which accurately reflects the fund manager's ability to operate in the market and control funds at any time. It is useful for small investors who lack ability, funds, and experience.

Special attraction.

(4) Convenient for investment.

Investors can subscribe and redeem funds at various sales venues at any time, which is very convenient.

A good incentive and restraint mechanism also prompts fund managers to pay more attention to integrity and reputation, emphasizing medium- and long-term, stable, high-performance investment strategies and excellent customer service.

As an innovative financial product, the launch of open-end funds can better mobilize investors' investment enthusiasm, and sales channels include bank networks, which can attract some new savings funds to enter the securities market, improve the investor structure, and play a role in stabilizing and

Develop the role of the market.