Different types of funds have different risks, some with high risks and some with low risks. For example, the capital preservation fund can protect the principal of investors from being affected if there is a loss; Rather than a capital preservation fund, if there is a loss, it may make investors lose their money.
According to the different investment risks and returns, funds can be divided into growth funds, income funds and balanced funds. According to different organizational forms, it can be divided into corporate funds and contractual funds. A fund is established by issuing fund shares to establish an investment fund company, which is usually called a corporate fund; The establishment of fund managers, fund custodians and investors through fund contracts is usually called contractual funds. China's securities investment funds are all contractual funds.
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Risk management of fund investment;
Most countries stipulate that hedge fund investors must be experienced and qualified investors, be aware of the risks of investment and be willing to bear these risks, because the possible benefits are related to risks. In order to protect funds and investors, fund managers can adopt various risk management strategies.
Hedge fund management companies may hold a large number of short-term positions or have a particularly comprehensive risk management system. The fund can set up a "risk officer" to be responsible for risk assessment and management, but it can not interfere with the transaction, or it can adopt a formal portfolio risk model and other strategies.
Various measurement techniques and models can be used to calculate the risk of hedge fund activities; According to the different fund size and investment strategy, fund managers will adopt different models. Traditional risk measurement methods do not necessarily consider the normality of returns and other factors. In order to comprehensively consider all kinds of risks, we can make up for the defect of measuring risks by adding models such as impairment and "lost time".
In addition to evaluating the market-related risks of investment, investors can also evaluate the risk that the mistakes or frauds of hedge funds may bring losses to investors according to the principle of prudent operation. Matters that should be considered include the organization and management of business by hedge fund management companies, the sustainability of investment strategies and the ability of funds to develop into companies.