Most funds in the market are open-ended, and these funds are also called open-end funds. Open-end fund refers to an investment fund whose scale is not fixed, but which can issue new shares or be redeemed by investors at any time according to market supply and demand.
Closed-end fund is relative to open-end fund, which refers to the investment fund whose fund size has been determined before issuance and remains unchanged within the specified period after issuance.
Judging from the operation of closed-end funds in China, no matter how the fundamental situation changes, the transaction price trend of closed-end funds in China has never deviated from the price fluctuation law of first premium and then discount.
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Risks existing in the fund
Because hedge funds are private equity funds, there is almost no requirement for public disclosure, and some people think it is not transparent enough. There are also many people who believe that compared with other financial investment management companies, hedge fund management companies are subject to less supervision and lower registration requirements, and hedge funds are more susceptible to special risks caused by managers, such as deviation from investment objectives, operational errors and fraud.
20 10 the new regulatory regulations proposed by the United States and the European union require hedge fund management companies to disclose more information and improve transparency. In addition, investors, especially institutional investors, also urge hedge funds to further improve risk management through internal control and external supervision.
With the increasing influence of institutional investors, hedge funds have become more and more transparent, and more and more information has been published, including valuation methods, positions and leverage. There are many similarities between the risks of hedge funds and other investments, including liquidity risk and management risk.
Liquidity refers to the ease of buying, selling or realizing assets; Similar to private equity funds, hedge funds also have a closed period, during which investors cannot redeem them. Management risk refers to the risk brought by fund management. Management risks include: unique risks of hedge funds such as deviation from investment objectives, valuation risk, capacity risk, concentration risk and leverage risk.
Valuation risk means that the net asset value of an investment may be miscalculated. Too much investment in a certain strategy will lead to capacity risk. If the fund's exposure to an investment product, department, strategy or other related funds is too large, it will cause concentrated risk. These risks can be managed by controlling conflicts of interest, limiting the allocation of funds and setting the scope of strategic exposure.
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