Are there certain restrictions on fund trading_How do funds make profits?

In stock trading, a trading system that suits you and adapts to the market is really key to sustained and stable profits. So as a novice in stocks, what basic investment knowledge do you need to know? The following is for your reference whether there are certain restrictions on fund transactions. Let’s take a look!

Is there any restriction on fund transactions? There are certain restrictions

Open and closed periods: Some funds have open and closed periods. The open period refers to the period during which investors can purchase or redeem fund shares, while the closed period refers to the period during which the fund suspends purchases or redemptions. During the closed period, investors cannot conduct buying and selling operations.

Minimum subscription amount: Some funds stipulate a minimum subscription amount, which is the minimum amount for investors to purchase fund shares. Investors need to meet the minimum subscription amount to purchase the fund.

Lock-up period: Some funds may have a lock-up period, that is, investors need to hold it for a certain period of time after purchasing before they can redeem it. During the lock-in period, investors cannot withdraw funds.

Redemption fees and redemption restrictions: Fund operators usually set redemption fees and redemption restrictions to control the liquidity of the fund and the frequency of investor redemptions. Investors need to understand the fund's redemption fees and restrictions and consider accordingly before redeeming.

What are the ways for funds to make profits?

Capital appreciation: The assets invested by the fund increase in value due to the improvement of market conditions during the holding period, and investors obtain differential income by selling fund shares.

Dividend income: Securities or bonds held by some funds may pay dividends or interest income, and the fund operator distributes these incomes to fund shareholders.

Dividend income: The fund operator will regularly distribute the fund's profits to fund share holders. Investors can choose to accept cash dividends or reinvest the dividend amount to purchase more fund shares.

Spread income: Some bond funds or regular open-end funds may purchase low-risk bonds and use the interest rate difference between bonds to obtain income.

Points to note in the prospectus

Fund managers often need to determine their investment objectives, scope, policies, etc. before operating an investment fund to ensure that the investments they make are high in return. , safety and good liquidity are the main goals. Risk and return are closely related. Fund managers try their best to obtain the highest returns with the lowest risk, and safety and liquidity complement each other. Managers can only achieve optimal investment by using investment tools rationally to achieve optimal investment in a combination. How fund managers use fund investment tools to achieve the fund's investment goals is an issue that investors should pay attention to when investing in funds.

Relevant information on the investment operations of the fund manager is set out in the fund prospectus. Mainly include:

The investment objectives of the fund

The objectives to be achieved by fund investment, such as striving to provide investors with long-term stable capital gains or fixed dividend income, etc.

The fund’s objectives should be consistent with the investors’ own objectives. If the fund's objectives change over time, you'll need to reevaluate your investments.

If you focus on growth, your goal is to increase the value of the fund over a long period of time; if you focus on income, your goal is to obtain a reliable income stream from your investment; if you focus on Stability, your goal is to ensure the safety and reliability of your investment. No investment can simultaneously achieve the above three goals. Some funds emphasize one goal; others allocate priority among multiple goals; and still others try to strike a balance among several different goals.

According to current regulations, the fund contract and prospectus (expansion prospectus) of each fund describe in detail the investment objectives of the fund.

The investment scope of the fund

The fund contract and prospectus (expansion prospectus) will describe the scope of securities that the fund may purchase, the subject matter of the fund's investment, how the fund selects them, and the fund's investment scope. Focus on the types of securities to buy and how they work in practice.

For example, financial instruments with good liquidity include domestic stocks, bonds, and other financial instruments that are publicly issued and listed in accordance with the law and allowed by the China Securities Regulatory Commission for fund investment. Among them, stocks issued by listed companies are the focus of investment. What type of securities or listed companies are the main objects of fund investment? For example, stocks of listed companies with excellent investment performance and stable growth and stocks of listed companies with great growth potential.