1. What is a fund?
Funds are indirect investment products. When investors buy funds, they actually entrust fund managers to invest in these funds. For example, if an investor buys a stock fund, the specific stock to be invested is decided and managed by the fund manager.
This is also one of the main differences between funds and stocks and bonds. The latter two are direct investment. Which stock or bond to buy and how much to buy are up to investors.
2. Sources of income of the Fund
According to the nature of the fund, the income source of the fund is the investment income of the fund manager. According to the different investment targets, funds can be divided into money funds, bond funds, mixed funds, stock funds, index funds, ETF funds, LOF funds, QDII funds and other categories.
Take stock funds as an example. Investors do not buy stocks directly, which means that the fund mainly invests in stocks, and stock dividends and dividends are the main sources of income for the fund.
3. Why are funds mixed?
Any investment is risky, and fund managers are no exception. The products they invest in may be profitable or lose money, which will lead to the rise and fall of the fund's income.
For example, if the market interest rate is high, the bond price will be low, and bond funds that buy bonds may also lose money or even lose money. Similarly, if the stock market rises recently, then the stock funds that buy stocks may also increase their income with the rise of the stock market, but the range is different.
The rise and fall of stock prices are influenced by many factors, such as economic fluctuations, market liquidity, performance of listed companies, positive or negative event news, etc. Equity funds mainly invest in a basket of stocks, so the return rate of the fund will change with the overall return of the invested stocks.
Finally, a warm reminder that financial management is risky and investment needs to be cautious.
Image source: Netease number