There is no risk-free fund. Like stocks, funds are risky, but because the amount of funds is small, the risk is smaller than stocks, but there are still some, so what kind of funds to choose is the key.
Generally speaking, the main difference is that securities investment funds are divided into closed-end funds and open-end funds according to trading methods, but most of them are open-end funds on the market now; According to the investment object of the fund, it can also be divided into stock funds, bond funds and money market funds; According to the degree of risk and return, it is divided into growth funds, income funds and balanced funds.
Open-end and closed-end funds
The following table lists the main differences between open-end funds and closed-end funds: both internationally and domestically, open-end funds have become the mainstream of the market. The main reason is that open-end funds provide investors with the convenience of subscription and redemption at any time, and the price is based on the net value of the fund, regardless of market supply and demand, which is relatively fair.
Other classifications of funds
To make an investment, we must first accept that income and risk are positively related, that is, varieties that may bring high income will have higher risks, and correspondingly, low-risk products may have limited income.
Stocks, bonds and money market funds
According to the definition of the newly promulgated Measures for the Operation of Funds, equity funds refer to funds in which more than 60% of fund assets are invested in stocks, bond funds refer to funds in which more than 80% of fund assets are invested in bonds, and money market funds refer to funds in which fund assets are only invested in money market instruments. Relatively speaking, stock funds have the highest risk, followed by bond funds, and money market funds have the lowest risk and the lowest return.
Growth, Income and Balanced Funds
Growth funds's goal is to provide increasing opportunities for investors' funds for a long time, with relatively high returns and high risks. Income-oriented funds focus on bringing relatively stable returns to investors, with bonds and bills as the main investment targets, with low returns but little risk. Balanced funds are between growth and income, and invest their funds in stocks and bonds.
In addition to the above classification methods, there are some special types of funds, the more common ones are:
Umbrella fund
Umbrella fund consists of a group of sub-funds that invest in different targets, and each sub-fund is managed independently. As long as you invest in any sub-fund, you can switch to another sub-fund at will without extra cost.
Index fund.
The composition and proportion of individual stocks in the fund portfolio are determined according to the sample constituent stocks and proportion of the market index as the investment target. The goal is that the fund's net value is close to the index performance, regardless of investment strategy. As long as the index stocks change, the fund manager will follow suit and change the shareholding ratio. Because of its simplicity and high investor acceptance, indexed investment is also the most commonly used investment method in the American fund system.
Convertible corporate bond fund.
Invest in convertible corporate bonds. When the stock market is depressed, you can enjoy the fixed interest income of bonds. When the stock market has a good prospect, it can be converted into stocks according to the conversion conditions agreed at the beginning, which has the characteristics of "attacking in advance and defending in retreat".
At present, the price of funds in the market is generally less than one yuan, so it is more cost-effective to invest in moderation.