What is a regular open-end bond fund?
Regular open-end debt fund is also a kind of open-end fund. Different from ordinary open-end funds, they are not free to buy and sell on any trading day, but open according to a fixed cycle, and then open for redemption after a period of closure. Generally, the opening time is not less than one week, and the longest is not more than one month. This kind of quasi-closed operation can reduce the liquidity impact caused by frequent subscription and redemption, ensure the relative stability of the fund scale, and also help to improve the long-term stability of the fund portfolio and the expected annualized expected return of the fund.
Characteristics of regular open-end bond funds;
1. Different from ordinary open-end funds, regular open-end bond funds have more consistent investment strategies because they do not need to deal with the purchase and redemption of non-open periods. Fund managers can allocate some bonds with low liquidity but high expected annualized income, such as three-year corporate bonds and credit bonds with credit around AA, to ensure high expected annualized expected income. In addition, this debt base can minimize the proportion of cash in investment, make leverage more efficient, and amplify the expected annualized expected return of bond portfolio, which has strong certainty.
2. Most of the regular open-end funds in the market are bond funds, and the design of regular open-end can keep the fund scale relatively stable, which plays a great role in improving the expected annualized expected return of bond funds. Although the short-term liquidity of the fixed-term open-ended debt base is weak, compared with other open-ended debt bases, it can exchange for higher expected annualized expected returns, which is a better choice for low-and medium-risk preference investors with fixed investment period and unable to withstand large fluctuations in net worth.