The curve chart describes the rise and fall of the fund's net value from May 2006 to April 2007.

What is shown below the curve chart is also the rise and fall of the unit net value and cumulative net value of this fund in the recent period.

You must first understand some basic knowledge about funds before you can understand this information.

Introduction to open-end fund trading:

◆Preparation process

Before investing in a fund, investors need to carefully read the prospectus, fund contract and account opening procedures of the relevant fund. , trading rules and other documents. Each fund sales outlet should have the above documents for investors to consult at any time.

Individual investors need to bring their agent bank debit card and valid identity document (ID card, military ID card or armed police card), while institutional investors need to bring their business license, organization code certificate or original registration certificate , as well as copies of the above documents with official seals, power of attorney, ID card and copies of the person in charge.

Bring the prepared information with you and fill in the fund business application form at the bank's counter branch. After completing the filling, you will receive a business receipt. Individual investors will also need to receive a fund trading card, which can be used two days after the day of handling the fund business. Go to the counter to get the business confirmation. After receiving the business confirmation, the unit or individual can engage in the purchase and redemption of funds.

◆How to purchase

After completing preparations for opening an account, citizens can choose the time to purchase funds. Individual investors can bring the debit card and fund transaction card of the agent bank and fill out the fund transaction application form at the counter of the agency outlet (institutional investors must stamp the reserved seal), which must be submitted before 15:00 on the day of purchase. The application will be accepted at the counter and a fund business receipt will be issued. Two days after handling fund business, investors can go to the counter to print the business confirmation letter.

◆How to Redeem

When investors intend to redeem their funds, they can bring the debit card and fund trading card of the account opening bank, also before 3 p.m. Fill out and submit the transaction application form, and after it is accepted at the counter, investors can inquire after 5 days and the redemption funds will be credited to their account.

◆How to withdraw

If trading investors need to withdraw the transaction, they can bring their fund trading card and bank debit card and fill in the transaction at the counter before 15:00 on the day of the transaction. Application form, indicating the withdrawal of the transaction. If it is after 15:00, some banks can make reservations for transactions based on the quoted price of the day and conduct transactions on the next working day.

At present, almost all banks and fund management companies support trading funds on the Internet.

Recently, I have seen that many netizens often ask what funds are about, as if funds are a very complicated and difficult thing to understand, and they also say that they cannot understand the fund knowledge articles recommended to read. Therefore, I often think about how to let these friends understand what a fund is in the shortest possible time and show them these funds that are not mysterious. So I came up with the idea to try to explain what a fund is in as simple a language as possible. I hope that these funds It helps for friends to learn about the fund as soon as possible.

Suppose you have a sum of money that you want to invest in bonds, stocks, and other securities to increase value, but you have neither energy nor professional knowledge, and the money is not much, so you want to partner with 10 other people. To invest, hire an investment expert (theoretically someone higher than me), and use the assets jointly invested by everyone to increase investment value. But here, if more than 10 investors negotiate with investment experts at any time, the matter will not be chaotic, so we recommend one of the most knowledgeable investors to take the lead in handling this matter. Regularly give him a commission based on a certain percentage from the assets jointly invested by everyone, and he will pay the masters' labor fees on their behalf. Of course, he himself takes the lead in organizing large and small things, including running errands from house to house, and always reminds the masters about the risks. Point, regularly announce investment profits and losses to everyone, etc. Don't work in vain, the money in the commission also includes his labor fees. These things are called partnership investments.

Amplifying this partnership investment model 100 times or 1,000 times is a fund.

If this kind of private partnership investment activity establishes a complete contract between investors, it is a private equity fund (it has not yet been recognized by the relevant laws and regulations of the national financial industry in our country).

If this kind of partnership investment activity is approved by the national securities industry management department (China Securities Regulatory Commission), the lead operator of this activity is allowed to raise funds from the public to attract investors to join the partnership, this will It is the issuance of public funds, which are now common funds.

What is the role of a fund management company? The fund management company is the lead operator of this kind of partnership investment, but it is a legal person and its qualifications must be approved by the China Securities Regulatory Commission. The fund company, like other fund investors, is also one of the partner investors. On the other hand, because it takes the lead in the operation, it has to withdraw labor fees (called fund management fees) at a certain proportion from the assets jointly contributed by everyone every year to hire on behalf of the investors. The investment experts (i.e., fund managers) who are responsible for trading on behalf of the managers, as well as those who help the experts collect information and conduct research, regularly announce the assets and income of the fund. Of course, these activities of fund companies are approved by the China Securities Regulatory Commission.

In order to ensure the safety of the assets jointly produced by everyone and prevent them from being misappropriated secretly by the fund company, the lead operator, the China Securities Regulatory Commission stipulates that the assets of the fund cannot be placed in the hands of the fund company. The fund company and fund manager only Don't touch money during trading operations. For bookkeeping and money management, you need to find someone who is good at it and has high credibility. This role is of course no other than a bank. So these investments (that is, fund assets) are placed in the bank, and a special account is established, which is accounted for by the bank, which is called fund custody. Of course, the bank's service fees (called fund custody fees) must also be paid annually in proportion to the assets of the partnership. Therefore, relatively speaking, fund assets only have the risk of losses due to poor operations by those experts, and there is basically no risk of being stolen. From a legal perspective, even if the fund management company goes bankrupt or even the custodian bank has an accident, the people collecting debts from them have no right to touch the assets of our fund accounts, so the safety of fund assets is very guaranteed.

If this kind of public fund is established after raising investors within a specified period of time (the state stipulates that it must reach at least 1,000 investors and a scale of 200 million yuan before it can be established), it will stop attracting other investors. investors, and agreed that no one can withdraw their capital midway, but by a certain year and month from now on, we will all break up and share the burden. If you want to cash out in the middle, you can only find someone else to sell it. This is a closed-end fund.

If this kind of public fund still welcomes other investors to invest in it at any time after its establishment, and also allows everyone to withdraw part or all of their own funds and deserved income at any time, this is an open-end fund. fund.

Whether it is a closed-end fund or an open-end fund, if you want to facilitate everyone's buying and selling, you can find a place like an exchange (securities market) to list the fund, and trade it freely among investors at market prices, that is Listed funds.

Now let’s read the concept of funds below, so that we won’t be too confused.

Securities investment funds are a collective investment and financial management method that invests in securities with maximum benefits and maximum risks. That is, by issuing fund units, investors’ funds are pooled and managed by the fund custodian. Custodian (usually a reputable bank), the fund manager (i.e. fund management company) manages and uses the funds to engage in investment in financial instruments such as stocks and bonds. Fund investors enjoy the returns from securities investments and also bear the risks arising from investment losses. Our country's funds are currently contract funds, which are a form of trust investment.

Characteristics of securities investment funds:

1. Expert financial management is an important feature of fund investment. The investment experts equipped by fund management companies generally have profound theoretical foundations in investment analysis and rich practical experience. They use scientific methods to study financial products such as stocks and bonds, combine investments, and avoid risks. Accordingly, every year the fund management company will withdraw management fees from the fund assets to pay for the company's operating costs. On the other hand, the fund custodian will also draw custody fees from the fund assets. In addition, open-end fund holders need to pay directly subscription fees, redemption fees and conversion fees. Holders of listed closed-end funds and listed open-end funds pay transaction commissions when they buy or sell units.

2. Portfolio investment to spread risks. By pooling the funds of many small and medium-sized investors, securities investment funds have formed strong capabilities and can invest in many types of stocks at the same time, thus diversifying the risks of concentrated investment in individual stocks.

3. Convenient investment and strong liquidity. The starting point requirements for the minimum investment amount of securities investment funds are generally low, which can meet the needs of small investors for securities investment. Investors can decide the amount of investment in the fund based on their own financial resources. Most securities investment funds have strong liquidity, making it very convenient for investors to recover their investments. Our country also provides a tax-free policy for people’s fund investment income.

At the same time, some issues related to securities funds will be explained below.

What are the fund subscription fees and subscription fees?

It is the fee you have to pay when you invest in a business, because it costs a lot of money for a fund company to publicize its activities to attract investors. Naturally, these expenses cannot be paid by the other party alone. In addition, by increasing your cost of joining the business, Reduce your desire to leave soon after joining.

What is the fund’s redemption fee?

You have to pay fees when you withdraw your investment and income, for reasons similar to the above. Another thing is that when someone withdraws their capital, the fund may have to sell some bonds and stocks in order to return cash to you. This is an action that is detrimental to the fund's assets and has a negative impact on the interests of other partners who do not withdraw their capital, so Let you keep some money as compensation.

What is a fund’s switching fee?

The same fund company operates multiple funds. If you hold one of the funds and want to exchange it for another fund operated by the fund company with the same amount of assets, you should pay the fund company The reason for the conversion fee is the same as the previous two. It is mainly to increase your cost of change and not to make you change frequently.

What is fund trading commission?

It is the labor fee collected from you by the business department of the securities company that provides you with trading services when the listed funds are transferred on the exchange market.

Why are there so many types of securities investment funds?

This is because different funds have different main investment directions and investment objects.

Stock funds are funds in which most of the funds are invested in the stock market;

Bond funds are funds in which most of the funds are invested in the bond market;

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Hybrid funds are funds that invest part of the funds in stocks and the other part in bonds according to the situation (of course, this investment ratio can be changed and adjusted), and can even be partially invested according to prior regulations. In other varieties;

A money market fund is a fund in which all assets are invested only in various short-term securities in the money market (the risk is very low but the return is also low).

The order of investment risks of these funds from high to low is roughly stock funds, hybrid funds, bond funds, and money market funds.

Since the risks are different, investors should choose a fund with a suitable risk level to invest in based on their own risk tolerance. They can also invest in low-risk funds, medium-risk funds and high-risk funds. Part of the way to diversify risks and balance the level of returns is called an investment portfolio.

What “growth”, “value”, “industry”, “blue chip”, “small cap”, “cycle”, “consumer goods”, etc. are used in the names of different funds? , is to mark its main investment strategy style on the name so that investors can understand it at a glance. Of course, it does not rule out that some funds are just looking for a good name to make it easier for the China Securities Regulatory Commission to approve their establishment.

Funds can be divided into broad and narrow senses. In a broad sense, funds are a collective term for institutional investors, including trust investment funds, unit trust funds, provident funds, insurance funds, retirement funds, and various foundations. fund. Funds in the existing securities market, including closed-end funds and open-end funds, have the characteristics of income-generating functions and value-added potential. From an accounting perspective, funds are a narrow concept, meaning funds with specific purposes and uses. Funds are formed because investors from governments and public institutions do not require return on investment or recovery of investment, but require the funds to be used for specified purposes in accordance with legal provisions or the investor's wishes.

The funds we are talking about now usually refer to securities investment funds.

Securities investment funds are an indirect form of securities investment. Fund management companies pool investors' funds through the issuance of fund units, which are custodian by the fund custodian (i.e. a qualified bank). The fund manager manages and uses the funds to invest in stocks, bonds and other financial instruments, and then assumes the responsibility Investment risks and profit sharing. Securities investment funds can be divided into different types according to different standards:

According to whether fund units can be added or redeemed, they can be divided into open-end funds and closed-end funds. Open-end funds are not listed for trading, and are generally purchased and redeemed through banks, and the fund size is not fixed; closed-end funds have a fixed duration, during which the fund size is fixed, and are generally listed and traded on securities exchanges, and investors buy and sell funds through the secondary market. unit.

Open-end funds

It is a type of fund with variable issuance amount. The total number of fund shares (units) can be increased or decreased at any time. Investors can follow the fund quotation at the business designated by the fund manager. Funds purchased or redeemed at the venue. Compared with closed-end funds, open-end funds have the characteristics of no limit on the number of issuances, the buying and selling price is based on the net asset value, buying and selling over the counter, and relatively small risks. They are particularly suitable for small and medium-sized investors to invest.

The history of world fund development is the history of the transition from closed-end funds to open-end funds. Take the United States, which has the most mature fund market, as an example. In September 1990, there were 3,000 open-end funds in the United States with total assets of US$1 trillion; while there were only 250 closed-end funds with total assets of US$60 billion. By 1996, the assets of open-end funds in the United States were US$3.5392 billion, and the assets of closed-end funds were only US$128.5 billion. The ratio between the two reached 27.54:1; in 1940, the ratio between the two was only 0.73 :1. In Japan, before 1990, closed-end funds accounted for the vast majority, and open-end funds were in a subordinate position. However, the situation changed fundamentally after the 1990s, and the assets of open-end funds reached approximately twice those of closed-end funds.

In countries and regions with early development investment funds in Asia, such as Hong Kong, Thailand, Taiwan, Singapore, and the Philippines, closed-end funds were the mainstay at the beginning of development, and gradually transitioned to the current coexistence of two types of funds. stage. From a global perspective, the net asset balance of the world's open-ended investment funds was US$2,355.4 billion in 1990, and by 1995 it had jumped to US$5,340.7 billion.

Open-end funds have gradually become the mainstream of world investment funds.

Most investment funds in various countries around the world were closed-ended when they started. This is because in the early stages of the development of investment funds, the handling fees for buying and selling closed-end funds were much lower than the handling fees for redeeming shares of open-end funds. From the perspective of fund management, since there is no pressure to redeem beneficiary certificates, investors' funds can be fully utilized to implement their investment strategies to maximize profits.

Closed-end funds

Belong to trust funds, which refer to investments whose size is determined before issuance, remains fixed within a specified period after issuance, and is traded on the securities market. fund.

Since closed-end funds are traded on the stock exchange through bidding, the transaction price is affected by market supply and demand and does not necessarily reflect the net asset value of the fund, that is, relative to its net asset value, the closed-end fund The trading prices of mutual funds show premiums and discounts. The practice of foreign closed-end funds shows that their transaction prices often fluctuate with price fluctuations of first premium and then discount. Judging from the operation of my country's closed-end funds, no matter how the fundamental situation changes, the trading price trend of my country's closed-end funds has never been able to break away from the price fluctuation pattern of first premium and then discount.

·According to different organizational forms, they can be divided into corporate funds and contract funds. A fund is established by issuing fund shares to establish an investment fund company, which is usually called a corporate fund; it is established by a fund manager, a fund custodian and an investor through a fund contract, which is usually called a contract fund. At present, my country's securities investment funds are all contract funds.

Corporate funds

Also known as mutual funds, it means that the fund itself is a joint-stock company, and the company raises funds by issuing stocks or beneficiary certificates. When investors purchase shares of a company, they become shareholders of the company, receive dividends or bonuses based on the shares, and share in the income from investment.

Features

1. ***Same as a fund, it is in the form of a joint-stock company, but it is different from a general joint-stock company in that its business is focused on securities investment trusts.

2.***The capital of the same fund is the capital of the company's legal person, that is, shares.

3.***The structure of the fund is the same as that of a general joint-stock company, with a board of directors and a general meeting of shareholders. Fund assets are owned by the company, and investors are shareholders of the company and the ultimate holders of the company's assets. Shareholders exercise their rights at the shareholders' meeting according to the size of the shares they own.

4. According to the company's articles of association, the board of directors is responsible for the safe growth of fund assets. For the convenience of management, mutual funds often have fund managers and custodians. The fund manager is responsible for the investment management of fund assets, and the custodian is responsible for supervising the investment activities of the fund manager. The custodian can (but is not required to) open an account in a bank and register the fund assets in his own name. In order to clarify the rights and obligations of both parties, there is a contractual relationship between *** and the fund company and the custodian. The custodian's responsibilities are listed in the "custodian agreement" signed between *** and the fund company. If there is a problem with the ***tong fund, investors have the right to ask directly from the ***tong fund company.

Contractual funds

Also known as unit trust funds, they refer to specialized investment institutions (banks and enterprises) that jointly invest to form a fund management company, and the fund management company acts as the entruster People raise idle funds in the society by issuing beneficiary certificates - "fund unit holding certificates" in the form of signing a "trust contract" with the trustee.

Features

Unit trust is a management company established by a document called a trust deed. In terms of organizational structure, it does not have a board of directors, and the fund management company itself acts as the trustee company. Establish a fund, manage the operation and operation of the fund by yourself or hire a manager on your behalf, and usually designate a securities company or underwriting company to handle the beneficiary certificates on your behalf - the issuance, sale, transfer, trading, profit distribution, and income of fund single holding certificates and principal and interest repayment payments.

The trustee accepts the entrustment of the fund management company and registers and opens an account for the fund in the name of the trustee or trust company. The fund account is completely independent from the account of the fund custody company. Even if the fund custody company goes bankrupt due to poor management, its creditors cannot use the fund assets. Its responsibilities are to manage, keep and dispose of trust property, supervise the investment work of fund managers, ensure that fund managers comply with the investment regulations listed in the public prospectus, and ensure that the investment portfolios they adopt comply with the requirements of the trust contract. Trustees are responsible for claims from investors when something goes wrong with a unit trust fund.

·Based on the differences in investment risks and returns, funds can be divided into growth, income and balanced funds.

·According to different investment objects, they can be divided into stock funds, bond funds, money market funds, futures funds, etc.

Stock funds

Is an investment fund that invests in stocks and is the main type of investment fund. The main function of stock funds is to concentrate the small investments of public investors into large funds. Invests in different stock portfolios and is a major institutional investor in the stock market.

Classification

Stock funds can be divided into preferred stock funds and common stock funds according to investment objects. Preferred stock funds can obtain stable returns. The risk is small. Income distribution is mainly dividends; common stock funds are currently the largest type of fund. This fund aims to pursue capital gains and long-term capital appreciation, and has greater risks than preferred stock funds. According to the degree of diversification of fund investment, stock funds can be divided into general common stock funds and specialized funds. The former refers to the diversified investment of fund assets in various types of ordinary stocks, while the latter refers to the investment of fund assets in certain special industries. Stocks are riskier, but may have better potential returns. Stock funds can also be divided into capital appreciation funds, growth funds and income funds according to the purpose of fund investment. The main purpose of investing in capital appreciation funds is to pursue rapid capital growth, thereby bringing about capital appreciation. Such funds have high risks and high returns.

Growth funds invest in common stocks that have growth potential and can bring income, and carry certain risks. Stock income funds invest in stocks issued by companies with stable development prospects and pursue stable dividend distribution and capital gains. Such funds have low risk and low income.

Features

1. Compared with other funds, stock funds have diverse investment objects and diverse investment purposes.

2. Compared with investors investing directly in the stock market, stock funds have diversified risks. Features such as lower cost. For ordinary investors, personal capital is limited after all, and it is difficult to reduce investment risks by diversifying investment types. However, if you invest in stock funds, investors can not only share the income of various stocks, but also diversify the risks across various stocks by investing in stock funds, which greatly reduces investment risks. also. Investors who invest in stock funds can also enjoy the relative cost advantages of large investment funds, reduce investment costs, improve investment efficiency, and gain the benefits of economies of scale.

3. From the perspective of asset liquidity, stock funds have the characteristics of strong liquidity and high liquidity. The investment objects of stock funds are stocks with excellent liquidity. The fund assets are of high quality and can be easily liquidated.

4. For investors, stock funds have stable operations and considerable returns. Generally speaking, stock funds are less risky than stock investments. Therefore, the income is relatively stable. Not only that, after the closed-end stock fund is listed, investors can also obtain the bid-ask spread by trading on the exchange. After the fund expires, investors have the right to distribute the remaining assets.

5. Stock funds also have the function and characteristics of financing in the international market. As far as the stock market is concerned, the degree of internationalization of its capital is lower than that of the foreign exchange market and bond market. Generally speaking, the stocks of each country are basically traded in the domestic market, and stock investors can only invest in stocks listed in their own country or in the stocks of a few foreign companies listed locally. In foreign countries, stock funds have broken through this restriction. Investors can invest in the stock markets of other countries or regions by purchasing stock funds, thus playing a positive role in promoting the internationalization of the securities market. Judging from the current situation of overseas stock markets, a large part of stock fund investment objects are foreign company stocks.

·According to different investment objects, securities investment funds can be divided into: stock funds, bond funds, money market funds, hybrid funds, etc. If more than 60% of the fund assets are invested in stocks, it is a stock fund; if more than 80% of the fund assets are invested in bonds, it is a bond fund; if it invests only in money market instruments, it is a money market fund; if it invests in stocks, bonds and currencies If the fund is a market instrument and the ratio of stock investment to bond investment does not comply with the regulations on bond and stock funds, it is a mixed fund. From an investment risk perspective, several funds bring different risks to investors. Among them, stock funds have the highest risk, money market funds have the least risk, and bond funds have an intermediate risk. Investment funds of the same type will have different risks due to different investment styles and strategies. For example, stock funds can be divided into: balanced, stable, index, growth, and growth based on risk levels. Of course, the greater the risk, the higher the return; the lower the risk, the lower the return.