If there is an extreme situation-the net value of the fund falls to zero, the foundation will be liquidated and delisted, and the principal will be lost, but it will never be in debt. Therefore, the fund will not lose money after the principal loss.
In fact, the fund market in China is getting better and better with the gradual improvement and development. Under normal circumstances, in the long run, funds will show an upward trend. For funds with long-term or sustained losses, the fund manager will appropriately change the fund allocation to achieve the effect of stop loss, or take measures such as fund discount to wait for the market to pick up.
Under extreme circumstances and conditions, when the net value of the fund loss fund unit reaches 0, the fund will be liquidated and delisted according to the relevant provisions of the national fund closure, so that the investment principal will be lost, but it will never become negative.
Fund investment is an indirect way of securities investment. By issuing fund shares, fund management companies concentrate investors' funds, which are managed by fund custodians (that is, qualified banks) and managed and used by fund managers to invest in financial instruments such as stocks and bonds, and then bear the investment risks and share the benefits. Generally speaking, the securities investment fund is an investment tool that collects the funds of many investors and gives them to the bank for safekeeping, and the fund management company is responsible for investing in stocks, bonds and other securities in order to maintain and increase the value.
According to the different ways of raising funds, securities investment funds can be divided into Public Offering of Fund and private equity funds. Public offering fund refers to a securities investment fund that raises funds from public investors by public offering and invests in securities. It is open, realizable and highly standardized. Private placement fund refers to a securities investment fund that raises fund funds from specific investors in a non-public way and invests in securities. It is non-public, fund-raising, large investment, closed and unlisted.
According to the different modes of operation, securities investment funds can be divided into closed-end securities investment funds and open-end securities investment funds. Closed-end securities investment funds, referred to as closed-end funds, are also called fixed-end securities investment funds. It refers to a securities investment fund whose capital scale does not increase or decrease within a specified time (also called "closed period") after a predetermined number of funds are issued. From the combination characteristics, it has important characteristics such as equity, creditor's rights and supervision.