In most cases, the fund purchase restriction is to control the fund size and maintain the fund performance, so the fund purchase restriction mainly appears in the bull market.
In a bull market, a large number of people tend to follow the trend and flood into the market. Most of them will go to star fund managers, network celebrity fund managers or long-term excellent funds, which will easily lead to a sharp increase in the scale of funds in a short period of time, thus leading to the passive management of funds by fund managers. In order to maintain the performance of the fund, many foundations take measures to restrict purchases and moderately maintain the stability of the fund scale by limiting the inflow of funds, so as to achieve the purpose of asset allocation and achieve better performance rankings.
In addition to the need to stabilize the fund size and ensure performance, the fund will also restrict subscription for some other reasons.
For example, before the fund dividends, the fund dividends are temporarily exempted from income tax. Due to this regulation, many institutional funds will consider pouring into the fund before the fund pays dividends, also in order to effectively control the fund size, avoid arbitrage of large funds, and set purchase restrictions before the fund pays dividends.
Different regions and countries have different time systems, and overseas markets will be closed when domestic transactions are normal. At this time, QDII funds invest in overseas markets, but they cannot be valued, so they will suspend subscription or purchase restriction.
Some funds that adopt innovative strategies will also be restricted from purchasing, and the scale of innovative funds is generally below 200 million yuan. Because the winning rate itself is not high when the scale is too large, the income of innovative funds will be diluted, so sometimes these innovative funds will control the scale in order to obtain better income, thus limiting the subscription.