Open-end investment funds refer to investment funds that raise funds publicly. Investors can purchase or redeem fund shares at any time according to their own needs, so they are also called high liquidity funds. Under the background that China stock market presents a large-scale entry of funds into the fund market, open-end investment funds have gradually become an important part of China stock market. This paper analyzes what an open-end investment fund is from the perspectives of its definition, characteristics, advantages and disadvantages, and investment strategy.

1. Definition: Open-end investment fund refers to a kind of securities investment fund initiated by managers, which raises funds from the public, invests according to certain investment strategies, uses various tools in the capital market to allocate assets, and is supervised by custodians.

2. Features:

(1) with strong liquidity, investors can purchase or redeem fund shares at any time according to actual needs.

(2) The scale of assets continues to expand, especially in recent years, the scale of China fund market has soared.

(3) Share is easy to understand and can be directly calculated and compared.

3. Advantages:

(1) The risk dispersion ability is better, and the risk of investors is more controllable.

(2) Investors do not need to manage and trade by themselves, which saves time and effort.

(3) The transaction is flexible, and investors can redeem or purchase according to market conditions.

4. Disadvantages:

The yield of (1) is relatively low, which is lower than other high-risk investments.

(2) High management cost and high cost.

(3) There are market risks in fund transactions, and market changes have a great impact on funds.

5. Investment strategy:

(1) Value investment strategy: Investment fund managers choose the underlying stocks according to the profit, P/E ratio and other indicators, buy high-quality company stocks that are undervalued by the market but have growth potential, and look for wealth management products with low P/E ratio and high dividend yield in order to obtain higher returns.

(2) Index tracking strategy: Select the investment target from the stocks with the securities rating of A and above that have been listed for a long time and are actively traded, so as to ensure that the historical performance trend of the reference index is replicated.

(3) Flexible allocation strategy: make dynamic investment according to the big market environment, industry trends and policy adjustments, and allocate funds according to the trends of industries and individual stocks in order to obtain higher returns.