Funds , also known as investment funds, are one of the main methods of asset management. It mainly concentrates social funds, issues income certificates (fund shares) to investors, and hands them over to professional fund management institutions to invest in various assets to maintain and increase their value.
As an important part of the financial industry, funds mainly refer to products with the characteristics of raising funds and agency investment. In different occasions, funds have different meanings; in a broad sense, funds can even include private equity, venture capital and other alternative assets; funds in a narrow sense mainly refer to public funds and private funds. Since private equity funds cannot be raised publicly, public investors are primarily exposed to public funds.
Eight types of funds:
In daily life, people often see eight kinds of funds, specifically currency funds , bond funds , mixed funds , stock funds, index funds , active funds, QDII funds and ETF funds .
A money fund is an open-ended fund that invests primarily in short-term money market instruments. The investment scope mainly includes short-term securities such as bank certificates of deposit, treasury bonds, central bank bills, commercial paper, and corporate bonds with higher credit ratings. It has the characteristics of low risk, high liquidity and low threshold. At the same time, the income of the fund is relatively stable, and the possibility of loss is very small, but it does not guarantee a certain profit or minimum income of the fund.
A bond fund is a fund that invests exclusively in bonds. It seeks more stable income by pooling the funds of many investors and investing in securities in bonds. Bonds refer to letters of credit and debts issued to investors by the government, financial institutions, industrial and commercial enterprises and other institutions in China to raise funds directly from the society, promising to pay interest at a certain interest rate and repay the principal according to agreed conditions. The investment objects of the Fund are mainly treasury bonds, financial bonds and corporate bonds. Generally, bonds provide investors with fixed income and repayment at maturity with less risk than stocks. Therefore, compared with stock funds, bond funds have the characteristics of stable income and low risk. Generally speaking, short-term debt funds yield 3%-4% and long-term debt funds 5%-6%. Compared with the high-quality subordinated debt base, the fund’s return can reach 7%-8%.
A hybrid fund refers to a fund that invests in stocks, bonds, money markets and other instruments at the same time without a clear investment direction. Its risk is lower than that of stock funds, and its expected return is higher than that of bond funds. It provides investors with a tool to diversify their investments between different assets. Suitable for investors with strong risk tolerance. The fund’s return rate is generally around 10%, but to a large extent depends on the investment ability of the investment manager and the relevant supporting investment research team.
Equity funds refer to funds that invest in the stock market. According to the investment method, it can be divided into value type, growth type and balance type. The fund’s return is generally around 15%, suitable for investors who accept high risk.
Index funds refer to fund products based on the constituent stocks of specific indexes (such as the CSI 300 Index, S&P 500 Index” data-wpil-keyword-link=”linked”>S&P 500 Index, Nasdaq 100 Index, Nikkei 225 Index, etc.) Select constituent stocks to build a portfolio to track the performance of the underlying index. It has the characteristics of long-term rising and low interest rates. According to the trading mode, it can be divided into ordinary open-end index funds, listed open-end index funds ( LOF ) and traded open-end index funds (ETF). According to the investment method, it can be divided into passive type and intensive type. Among them, the returns of passive index funds are greatly affected by the market/or composition and calculation method of fund returns, or after understanding the fund classification , let’s take a look at the composition and calculation methods of fund returns.
The composition of the fund’s income mainly includes dividends, the spread between buying and selling securities, dividends, interest on deposits, interest on bonds and other income. When the fund returns, we will see more money in the fund. Funds go up and down and will change based on market conditions. The fund also has a price and purchased funds will be converted into component amounts based on equity . When you want to sell, according to “sell shares”.
Calculate how much you can change. Fund investing is not only about returns, but also about the risks behind obtaining those returns. High returns must be accompanied by high risks.
Difference Between Accumulated P&L and Position P&L
Many newbies will see position gains and losses and accumulated gains and losses in their accounts. What is the difference between the two? In short, position gains and losses refer to the cumulative gains and losses generated from the shares currently held by the Fund, including fluctuation gains and losses arising from fluctuations in net value and historical cash dividends (including subscription fees) corresponding to the shares held. Accumulated income from stock products, including income from redemption of stock (excluding subscription fees).