In recent years, as investors' demand for risky assets such as stocks has increased, collective investment vehicles such as funds have attracted much attention.

While it does have advantages, some investors also have a bias that they can buy and sell funds anytime and anywhere.

However, one of the basic principles of a fund is that it cannot be fully redeemed, so why can’t the fund be fully redeemed?

1. Structural Principles of Funds To understand why funds cannot be fully redeemed, you first need to understand the structural principles of funds.

Fund operation models can be roughly divided into two types, namely open-end funds and closed-end funds.

Open-end funds mean that investors can subscribe and redeem at any time during the open period, while closed-end funds mean that after the fund subscription period, the fund manager will no longer accept new subscription and redemption applications.

Although open-end funds have liquidity advantages, they are essentially a collective investment rather than a deposit or deposit-withdrawal product.

Compared with deposit-withdrawal financial products such as bank savings deposits, funds are more investment-oriented.

Therefore, when investors buy funds, they should choose and invest according to their own investment period and needs, and should not regard them as deposits that can be withdrawn at any time.

2. Investment attributes of the fund The investment attributes of the fund determine that after its establishment, the funds will be invested in assets such as stocks and bonds, not cash flow.

If investors redeem a large amount of funds and the funds happen to hold insufficient stocks, bonds and other assets, the fund manager cannot immediately repay investors through asset liquidation and can only raise funds internally to pay for redemption applications in a short period of time.

This requires fund managers to maintain the liquidity level of fund assets accordingly and introduce liquid assets with sufficient cash to ensure that investors' redemption needs can be met at any time.

3. Cost of Redemption Operations In order to avoid disturbing the overall market value of the fund due to redemption operations for individual investors, fund managers often adopt "cash substitution" or "paid redemption" methods.

That is to say, for ordinary funds, the fund manager will formulate the asset allocation in the fund's investment strategy and white paper. If investors choose to redeem, they will redeem according to the regulations based on the net value at the time of redemption.

The rate deducts a series of costs such as management fees, interest, and securities clearing fees on a case-by-case basis.

4. Fund Compliance Supervision Fund is a financial product recognized and supervised by the China Securities Regulatory Commission.

Subscription and redemption of funds need to comply with certain laws and regulations and be completed without violating the compliance regulatory requirements of financial institutions.

When buying and selling funds, investors should read the relevant fund contracts and product instructions in detail to understand the return risk characteristics and other points that need attention to avoid violating regulations and suffering losses.

To sum up, the failure of the fund to redeem all funds is a phenomenon that occurs and is not intentional by the fund manager.

The investment attributes and structural principles of the fund determine that the fund is not a highly flexible savings financial product. Therefore, investors should treat fund redemptions with caution and not treat them as deposits that can be withdrawn at any time.