an incubation fund is a fund that is privately funded when it is created.

The investors of such funds are usually people related to the investors and their family members.

this kind of fund allows fund managers to try different investment styles with a small capital scale before the fund is opened or before facing formal rules and regulations.

this type of fund has never been officially called "incubation fund", but has always been called "restricted distribution fund".

Incubation funds generally attract funds in two ways.

If this kind of fund can be hatched successfully, that is, "born", it will bring excess profits to investors.

However, if there is not enough return, the fund will be liquidated and "buried".

In recent years, the use of incubation funds has also caused some criticism.

This is because the incubation funds are not under regular management, so the return it obtains may be greater than normal.

when this kind of fund is publicized to the public, it may not realize its return as advertised.

in order to avoid problems (losses), investors must determine whether the fund was originally an incubation fund.

However, this is not easy, because fund managers always try to hide the "incubation" origin of funds.