one year is a long time, but if the fund is closed for one year, the fund will go up and down, and the citizen can't operate it every day. To a certain extent, the redemption of the citizen is avoided and the handling fee is saved, but there is no way to determine whether it will lose money to the principal.
Because the situation of each fund is different, investors can judge from the past performance. Although the past performance does not represent the future, it will be of some reference to some extent.
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Closed-end Funds refer to securities investment funds whose total issue amount and issue period have been determined at the time of establishment, and the total issue amount remains unchanged within the specified period after the issuance. Investors of closed-end funds can't redeem the fund shares from the issuer during the fund's existence, and the realization of the fund shares must be listed and traded through the securities exchange. The circulation of fund units adopts the method of listing on the stock exchange, and investors must bid on the secondary market through securities brokers when buying and selling fund units in the future. [1]
Closed-end funds belong to trust funds, which means that the total amount of approved fund shares is fixed within the term of the fund contract, and the fund shares can be traded on the legally established stock exchange, but the fund amount holders are not allowed to apply for redemption. The relationship between open-end fund and closed-end fund: the isomorphism of open-end fund and closed-end fund has become two basic modes of fund operation. Open-end fund refers to an investment fund whose scale is not fixed, but can issue new shares or be redeemed by investors at any time according to market supply and demand.
closed-end funds, as opposed to open-end funds, refer to investment funds whose fund size has been determined before issuance, and whose fund size is fixed after issuance and within the specified period.
Open-end funds are not traded on the market, but are generally purchased and redeemed by banks. The fund scale is not fixed, and fund units can sell them to investors at any time or buy them back at the request of investors. Closed-end funds are not allowed to accept new shares and offer shares for a period of time until a new round of opening up. When opening up, you can decide how much you offer or how much you invest again, and newcomers can also buy shares at this time. Generally, the opening time is one week and the closing time is one year.
editing and broadcasting of distinguishing features
The main difference between open-end funds and closed-end funds is that the latter has a long closed period, and the number of issues is fixed, so the holders can't redeem it during the closed period and can only buy and sell it in the secondary market. Open-end funds can be redeemed, and listed and traded open-end funds can also be bought and sold. Therefore, open-end funds have to be "always ready" for the possible redemption of their holders, and their investment style is relatively stable; Closed-end funds don't have to worry about redemption during their existence. Everything has both good and bad sides. It is precisely because closed-end funds do not have to worry about redemption, similar to the holder lending money to the fund company for stock trading, and agreeing to pay back the money after 5, 1 or 2 years. It is not certain whether there is interest.
the holder cannot ask the fund company to repay the money in advance. Therefore, fund companies have great autonomy over the money and can even play the trick of "interest transfer". Of course, there are also fund companies and fund managers with regular operations, and the returns of closed-end funds they manage are not necessarily worse than those of open-end funds. To sum up, investors have to decide what kind of fund to buy according to their investment preferences, risk tolerance, understanding and trust of fund companies and fund managers, and long-term judgment of the market. The closed-end fund discount rate introduces the connotation of the discount rate as follows: with the net value of the fund as the reference, the fund price is a kind of depreciation relative to the net value of the fund, so the denominator should be the net value, not the price. The formula of actual discount and premium is the same: overflow (discount) price rate = (transaction price-fund unit net value)/fund unit net value ×1% If it is negative, it is discount rate; If it is positive, it is the premium rate. The discount rate of closed-end funds is still high, mostly between 2% and 4%, and the discount rate of small and medium-sized funds with short maturity is lower.
For the same fund, it is of course better to buy when the discount rate is high; However, the selection of funds should not only look at the discount rate, but also select some small and medium-sized funds with moderate discount rate and short maturity. According to domestic and foreign experience, it is normal that the price of closed-end fund transactions is discounted.
the discount will affect the investment value of closed-end funds. In addition to investment objectives and management level, discount rate is an important factor in evaluating closed-end funds, and there are certain investment opportunities for investors with high discount rate. Because the closed-end fund is to be paid or liquidated according to the net value after its operation expires, the higher the discount rate, the greater the potential investment value.
another feature of closed-end funds is that they have a duration. In China, this term cannot be less than five years, and the term of a general closed-end fund is fifteen years. After the closed-end fund expires, there are three ways to deal with it: one is liquidation, that is, deducting a certain fee from the net value of the fund and returning it to investors; The second is to turn into an open-end fund, which we often say is "closed to open"; The third is to extend the maturity period, which is rarely used.