Insurance fund refers to a special fund set up to compensate for economic losses caused by accidents or economic needs caused by personal injury or loss of work ability. In modern society, insurance funds generally have four forms:

1, centralized national fiscal reserve funds. Fund is a kind of monetary fund set up in the national budget, which is specially used to meet unexpected expenses and special needs in the national economic plan, such as the relief of catastrophic natural disasters, foreign invasion, mistakes in the national economic plan, etc.

2. Insurance funds of professional insurance organizations, that is, insurance companies and other insurance organizations collect insurance funds by collecting insurance premiums to compensate insurance units and individuals for losses caused by disasters or pay insurance benefits due.

3. Social security fund. As a national social policy, social security aims to provide a series of basic living guarantees for citizens. Citizens have the right to get material help from the state and society in case of old age, illness, unemployment, disaster and loss of working ability. Social security generally includes social insurance, social welfare and social relief.

4. Self-insurance funds, that is, insurance funds raised by economic units, are used to compensate for the losses of disasters and accidents. There are professional self-insurance companies abroad to raise funds to compensate the losses of parent companies and subsidiaries; China has a "safety production guarantee fund" through which industries can protect themselves, such as the "safety production guarantee fund" set up in sinopec group.

Characteristics of stock funds

1. Compared with other funds, equity funds have diversified investment targets and purposes.

2. Compared with investors' direct investment in the stock market, equity funds have the characteristics of risk diversification and low cost. For ordinary investors, individual capital is limited after all, and it is difficult to reduce investment risks by diversifying investment types.

However, if you invest in stock funds, investors can not only share the benefits of all kinds of stocks, but also spread the risks among all kinds of stocks by investing in stock funds, which greatly reduces the investment risks. In addition, investors who invest in stock funds can also enjoy the relative advantages of large-scale investment of funds, reduce investment costs, improve investment efficiency and obtain the benefits of economies of scale.

3. From the perspective of asset liquidity, equity funds have the characteristics of strong liquidity and high liquidity. Equity funds invest in stocks with excellent liquidity, with high asset quality and easy realization.

4. For investors, equity funds operate stably and earn considerable profits. Generally speaking, the risk of stock funds is lower than that of stock investment, so the income is more stable. Not only that, after the closed-end stock fund goes public, investors can also get the bid-ask difference by trading on the exchange. After the fund expires, investors have the right to distribute the remaining assets.

5. Equity funds also have the function and characteristics of financing in the international market. As far as the stock market is concerned, the degree of internationalization of its capital is lower than that of foreign exchange market and bond market. Generally speaking, the stocks of all countries are basically traded in their own markets, and stock investors can only invest in stocks listed in their own countries or stocks listed in a few foreign companies.

In foreign countries, stock funds have broken through this restriction, and investors can invest in the stock markets of other countries or regions by purchasing stock funds, which has played a positive role in promoting the internationalization of the securities market. Judging from the current situation of overseas stock markets, a large part of the investment objects of equity funds are foreign company stocks.