What are the advantages of active funds? The difference between active fund and passive fund

When is the best time to buy active funds? Many people may not be familiar with the timing of fund purchase, and they don't know when they can make a profit by buying funds. Therefore, Bian Xiao specially brought the advantages of active fund to everyone, and I hope you like it.

What are the advantages of active funds?

Flexible and independent: the management team of active funds can choose their own investment targets according to market conditions and investment consultation, and can make trading decisions according to their own research and judgment, which has high flexibility and autonomy.

Highly personalized investment strategy: active funds can choose various assets according to the investment strategy and research ability of fund managers in order to pursue investment returns beyond market performance. Investors can choose their own active funds according to their risk preferences and investment objectives.

Opportunity optimization: through in-depth research and analysis, active funds seize investment opportunities in the market in time. Fund managers can choose the trading opportunity flexibly according to their own judgment and experience, in order to pursue a return above the market average.

Main differences between active funds and passive funds

Investment mode: the investment portfolio of active funds is selected and traded by the fund manager according to market conditions and personal judgment in order to obtain a return higher than the market average; The investment strategy of passive funds is to track a specific index and hold index stocks or other assets that represent the performance of the index, in order to keep consistent with market performance.

Management cost: the management cost of active funds is usually higher, because fund managers need to do more research and analysis; The management cost of passive funds is usually low, because their investment strategy is relatively simple, and they only need to track the performance of specific indexes.

Performance: the performance of active funds depends on the investment ability and market environment of fund managers, and they have the opportunity to get more than the average market performance; However, the performance of passive funds is generally consistent with the performance of the tracking index and cannot exceed the market performance.

Risk and volatility: the investment strategy of active funds may bring high risk and volatility, because the active investment decision made by fund managers may lead to investment losses; Passive funds, on the other hand, have low risk and small fluctuation, because their strategy is to track market performance and not make trading decisions actively.

Opportunities to buy active funds

The buying opportunity of active funds depends on individual investment objectives, risk tolerance and market conditions. Here are some suggestions on the timing of purchasing active funds:

Long-term investment: Active funds are generally suitable for long-term investment, because fund managers pursue returns beyond the benchmark index by selecting stocks or adjusting positions. If you invest for a long time, you can better enjoy the fund manager's stock selection ability.

Evaluate the market environment: Before buying active funds, you should evaluate the current market environment. If the market expectation is optimistic and the market is upward, it is beneficial to the active operation ability of fund managers, which may be a good time to buy active funds.

Diversification: It is suggested to diversify investment funds into different types and styles of active funds to reduce the impact of specific fund performance. According to their own risk preferences and investment objectives, allocate a variety of different funds to obtain better portfolio results.

Regular fixed investment strategy: for active funds, regular fixed investment strategy is helpful to average investment cost and reduce the influence of market fluctuation. Through regular investment, you can buy more stocks when the market fluctuates and get higher returns when the market rises.

Performance of fund managers: When choosing active funds, we should pay attention to the performance and management ability of fund managers, and examine their past investment records and attitudes towards risks. The ability and decision-making of fund managers will directly affect the performance of funds, and it may be more beneficial to choose funds with better performance and stable management team.

It should be noted that investment is risky, and past performance does not represent future performance. Before purchasing an active fund, it is recommended to conduct full investigation and evaluation, understand the investment strategy, expenses and potential risks of the fund, and make wise investment decisions according to your own situation. If necessary, please consult professional investment consultants or practitioners for personalized advice.

When will active funds buy?

The income of active funds is closely related to the stock market. When choosing the buying opportunity, you should buy when the stock market is at a low level, so as to obtain satisfactory returns.

How to buy stock funds?

Stock is a part of the ownership of a joint-stock company and a certificate of ownership issued by a joint-stock company. It is a kind of securities issued by a joint-stock company to all shareholders as a holding certificate to raise funds and obtain dividends and bonuses. Simply put, if you buy shares in this company, you become a shareholder of this company. Equity funds, also known as equity funds, refer to funds that invest in the stock market. Equity funds mainly invest in stocks, and the proportion of their investment in stocks is required to be no less than 80%, so equity funds are also deeply influenced by the trend of the stocks they invest in.

Stock fund refers to investing in the stock market. When investing, the stock component generally accounts for 80%. Fund companies will chip in to buy shares of listed companies, and the people who buy funds indirectly own shares. Equity funds are generally high-risk and high-return, not as stable as money funds, and stock funds fluctuate greatly. Therefore, to buy stock funds, we must first understand before buying.