Funds can be divided into broad sense and narrow sense. Broadly speaking, a fund refers to a certain amount of funds set up for a certain purpose.

Definition of fund

Suppose you have a sum of money and want to invest in bonds, stocks and other securities to realize value-added, but you have no energy, professional knowledge and little money, so you want to invest in partnership with other 10 people and hire an investment expert to operate the assets invested by everyone to realize value-added. But there, if investors above 10 consult with investment experts at any time, there will be no chaos, so they will choose a person who knows best to take the lead in this matter. Give him a certain percentage of each person's assets regularly, and he will pay the service fee to the investment master on his behalf. Of course, he will take the lead in making arrangements for big and small things, including running errands from door to door, reminding the master of risks at any time, and regularly announcing the investment profits and losses to everyone. It didn't come for nothing, and the money in the commission also has his service fee. These things are called partnership investment.

Enlarge this partnership investment model by 100 times and 1000 times, which is the fund.

This kind of private partnership investment activity belongs to private equity fund if a complete contract is established between investors (which has not been recognized by the relevant laws and regulations of the national financial industry supervision in China).

If this partnership investment activity is approved by the national securities regulatory authority (China Securities Regulatory Commission), and the lead operator of this activity is allowed to make a public offering to attract investors to join the partnership investment, this is the issuance of publicly offered funds, which is a common fund now.

Fund 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.