What is a fund and how to buy it?

Funds have broad and narrow definitions. Fund in a broad sense is the general name of institutional investors, including trust and investment funds, unit trust funds, provident funds, insurance funds, retirement funds and funds of various foundations. Funds in the existing securities market, including closed-end funds and open-end funds, have the characteristics of income function and value-added potential. From the accounting point of view, capital is a narrow concept, which refers to funds with specific purposes and uses. Because the investors of government agencies and institutions do not require investment returns and investment recovery, but require funds to be used for designated purposes in accordance with the law or the wishes of the investors, funds are formed.

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

Securities investment 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. According to different standards, securities investment funds can be divided into different types:

According to whether fund units can be increased or redeemed, they can be divided into open-end funds and closed-end funds. Open-end funds are not listed and traded, but are generally purchased and redeemed by banks, and the fund scale is not fixed; Closed-end funds have a fixed duration, and the fund size is fixed during the duration. Generally listed on the stock exchange, investors buy and sell fund shares through the secondary market.

According to different organizational forms, it can be divided into corporate funds and contractual funds. A fund is established by issuing fund shares to establish an investment fund company, which is usually called a corporate fund; The establishment of fund managers, fund custodians and investors through fund contracts is usually called contractual funds. At present, China's securities investment funds are all contractual funds.

According to the difference of investment risk and income, it can be divided into growth fund, income fund and balanced fund.

According to different investment objects, it can be divided into stock funds, bond funds, money market funds and futures funds.

According to different investment objects, securities investment funds can be divided into: stock funds, bond funds, money market funds, hybrid funds and so on. If more than 60% of the fund's 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; Money market funds that only invest in money market instruments; If it invests in stocks, bonds and money market instruments, and the ratio of stock investment to bond investment does not meet the requirements of bonds and stock funds, it is a mixed fund. From the perspective of investment risks, the risks brought by several funds to investors are different. Among them, equity funds have the highest risk, money market funds have the lowest risk and bond funds have the middle risk. Due to different investment styles and strategies, the risks of the same type of investment funds will be different. For example, stock funds can be divided into: balanced, stable, exponential, growth and growth according to the degree of risk. Of course, the greater the risk, the higher the rate of return; The risk is small, and the income is correspondingly lower.

Introduction to open-end fund transactions:

◆ Preparation process

Before purchasing a fund, investors need to carefully read the prospectus, fund contract, account opening procedures, trading rules and other fund-related documents, and all fund sales outlets should have the above documents for investors to consult at any time.

Individual investors are required to carry the debit card of the agent bank and valid identification documents (ID card, military officer's card or armed police card), and institutional investors are required to carry the original business license, organization code certificate or registration certificate, as well as the official seal copy of the above documents, power of attorney, agent's ID card and copy.

With the preparation materials, the customer goes to the bank counter to fill in the application form for fund business, and then receives the business receipt. Individual investors also receive fund trading cards, and they can go to the counter to receive business confirmation two days after handling fund business. Units or individuals can engage in fund subscription and redemption after receiving business confirmation.

◆ How to buy?

After completing the preparation for opening an account, citizens can choose their own time to buy funds. Individual investors can bring the debit card and fund trading card of the correspondent bank to the counter of the agency outlet to fill in the Application Form for Fund Trading (institutional investors need to affix the reserved seal), and must submit the application before the day of subscription 15: 00, and the counter will accept and receive the receipt of fund business. Two days after handling the fund business, investors can print the business confirmation at the counter.

◆ How to redeem?

When investors intend to redeem their funds, they can bring the debit card and fund trading card of the opening bank, and also fill in and submit the transaction application form before 3: 00 pm. After being accepted at the counter, investors can inquire and redeem the fund after five days.

◆ How to quit?

If trading investors need to cancel trading, they can bring their fund trading card and bank debit card to the counter before the trading day 15, fill in the trading application form and indicate the cancellation of trading. If it is after 15, some banks can make an appointment for trading according to the quotation of the day and trade the next working day.

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

Recently, many netizens often ask what the fund is about, as if the fund is a very complicated thing, and they all say that they can't understand the fund knowledge articles recommended for reading. So I often think about how to make these friends understand what a fund is and show it to you in the shortest time, so I have an idea to explain what a fund is in popular language as much as possible, hoping to help these friends understand the fund as soon as possible.

Suppose you have a sum of money to invest in bonds, stocks and other securities to increase the value, but you have no energy or professional knowledge, and the money is not too much, so you want to invest in partnership with other 10 people and hire an investment expert (theoretically higher than me) to operate the assets invested by everyone to increase the value. But there, if investors above 10 negotiate with investment experts at any time, it won't be chaotic, so they recommend someone who knows the most about it to take the lead. Give him a certain percentage of everyone's assets on a regular basis, and he will pay the master service fee 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. , so I 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.

What is the role of fund management companies? The fund management company is the lead operator of this kind of partnership investment, but it is a corporate legal person, and its qualification must be approved by the China Securities Regulatory Commission. Fund companies, like other fund investors, are also partners. On the other hand, due to its leading operation, it is necessary to extract service fees (called fund management fees) from the assets jointly produced by everyone every year, manage investment experts (fund managers) who are responsible for transactions on behalf of investors, and help experts collect information and engage in research, and regularly announce the assets and income of the fund. Of course, these activities of fund companies are approved by the CSRC.

In order to ensure the safety of the assets produced by all of us, the lead operator of the fund company will not steal or misappropriate them. China Securities Regulatory Commission stipulates that the assets of a fund cannot be placed in the hands of fund companies, and fund companies and fund managers only care about trading operations and cannot touch money. Find someone who is good at this matter and has high bookkeeping credit. Of course, this role belongs to the bank. So these contributions (that is, fund assets) are placed in the bank, and a special account is built, which is kept by the bank and called fund custody. Of course, the service fee of the bank (called fund custody fee) must be paid from the assets of the partnership every year. Therefore, relatively speaking, fund assets only have the risk of loss caused by poor operation of experts, and there is basically no risk of theft. From a legal point of view, even if the fund management company goes bankrupt or even the custodian bank has an accident, the person who collects debts from it has no right to touch the assets in everyone's fund account, so the security of fund assets is very guaranteed.

If this kind of Public Offering of Fund is announced to be established after raising investors within the prescribed time limit (the state stipulates that it must have at least 1 000 investors and the scale can reach 200 million yuan before it can be established), it will stop attracting other investors and stipulate that no one can withdraw from the fund halfway. However, until some month in the future, all of us will have to settle accounts and share the burden. If you want to cash in halfway, you have to find someone else to sell it yourself. This is a closed-end fund.

This kind of Public Offering of Fund, if declared, still welcomes other investors to invest at any time, and at the same time allows everyone to withdraw their own funds and due income at any time. This is an open-end fund.

Whether it is a closed-end fund or an open-end fund, if it is convenient for everyone to buy and sell, we will find an exchange (securities market) to list the fund and trade it freely among investors at the market price. This is a listed fund.

Now look at the following fund concept, don't be too dizzy.

Securities investment fund is a kind of collective investment and financial management method with shared interests and risks. That is, by issuing fund units, investors' funds are concentrated, managed by fund custodians (usually reputable banks), managed and used by fund managers (namely fund management companies), and invested in financial instruments such as stocks and bonds. While enjoying the income from securities investment, fund investors should also bear the risks brought by investment losses. The funds in China are all contract funds for the time being, which is a trust investment method.

The characteristics of securities investment funds:

1. Expert financial management is an important feature of fund investment. Investment experts equipped by fund management companies generally have a profound theoretical foundation of investment analysis and rich practical experience, scientifically study financial products such as stocks and bonds, make portfolio investments, and avoid risks. Accordingly, the fund management company will withdraw management fees from the fund assets every year to pay the company's operating costs. On the other hand, the fund custodian will also withdraw the custody fee from the fund assets. In addition, open-end fund holders need to pay the subscription fee, redemption fee and conversion fee directly. Holders of listed closed-end funds and listed open-end funds need to pay trading commissions when buying and selling fund shares.

2. Securities investment and risk diversification. By pooling the funds of many small and medium-sized investors, the securities investment fund has formed a strong strength, which can diversify the investment in multiple stocks at the same time, thus dispersing the risk of concentrated investment in individual stocks.

3. Convenient investment and strong liquidity. The minimum investment requirements of securities investment funds are generally low, which can meet the needs of small and medium-sized investors for securities investment. Investors can decide the investment quota of the fund according to their own financial resources. Most securities investment funds have strong liquidity, which makes it very convenient for investors to recover their investment. China also gives tax exemption to people's fund investment income.

And the related problems of securities funds are explained.

What are the subscription fees and subscription fees of the fund?

It's the fee you have to pay for investing in a partnership, because it costs a lot of money for fund companies to publicize activities to attract investors, and these expenses naturally cannot be paid by others. In addition, by increasing the cost of your participation, you will reduce your desire to leave soon after joining the partnership.

How much is the redemption fee of the fund?

In other words, you have to pay the price for recovering your investment and income for similar reasons. Another is that some people withdraw their capital, and the fund may have to sell some bond stocks in order to pay back your cash. This is an act that is not good for the assets of the fund, and it also has a bad influence on the interests of other partners who do not withdraw their shares, so let you leave some expenses as compensation.

How much is the conversion fee of the fund?

That is, 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 according to the same amount of assets, you have to pay the conversion fee to the fund company. The reason is the same as the above two, mainly to increase the cost of your replacement and prevent you from changing frequently.

What is the fund transaction commission?

It is the service fee charged by the business department of the securities company that provides trading services for you when the listed fund is transferred in 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 targets.

Equity funds are funds that invest most of their funds in the stock market;

Bond funds are funds that invest most of their funds in the bond market;

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

Money market funds are all kinds of short-term securities whose assets are only invested in the money market (low risk and low return).

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

Because of the different risks, investors should choose the fund suitable for the risk level according to their own risk tolerance, and they can also spread risks and balance the income level by investing in some low-risk, medium-risk and high-risk funds. This behavior is called portfolio.

What are the names of different funds such as growth, value, industry, blue chip, small cap, cycle and consumer goods? ? They put the main investment strategy on the name, so that investors can see at a glance. Of course, it does not rule out that some funds just wanted to find a good name for the CSRC at that time, so that it was easy to approve the establishment.

The above is mainly about securities investment funds. There are also real estate funds that invest in real estate, futures option funds that invest in futures options, gold funds that invest in the gold market, and industrial funds that invest in industry. For us fund investment novices, there are few investment opportunities in these funds. Let's start with the most common securities funds.

Stock is a stock issued by a joint stock limited company to investors when raising capital. Stock represents the ownership of its holder (that is, shareholder) to a joint-stock company. This kind of ownership is a comprehensive right, such as attending the shareholders' meeting, voting, and participating in major decisions of the company. Receive dividends or share dividends, etc. Every stock in the same category represents the equal ownership of the company. The share of ownership of the company owned by each shareholder depends on the proportion of shares held by each shareholder to the total share capital of the company. Generally, stocks can be traded and transferred with compensation, and shareholders can recover their investment through stock transfer, but they cannot ask the company to return their investment. The relationship between shareholders and the company is not a creditor-debtor relationship. Shareholders are the owners of the company, and they shall bear limited responsibilities, risks and profits to the extent of their capital contribution.

Stock is the product of socialized mass production and has a history of nearly 400 years. As the fruits of human civilization, joint-stock system and stock are equally applicable to China's socialist market economy. Enterprises can raise funds for production and operation by issuing shares to the public. By controlling majority ownership, the state can control more resources with the same funds. Currently in Shanghai. Most companies listed on Shenzhen Stock Exchange are state-owned holding companies.

Stocks have the following basic characteristics:

Ability to repay without compensation. Stock is a kind of negotiable securities with free repayment period. After investors subscribe for shares, they can no longer ask for withdrawal, but can only sell them to third parties in the secondary market. Share transfer only means the change of the company's shareholders, and does not reduce the company's capital. As far as the term is concerned, as long as the company exists, the stock it issues exists, and the term of the stock is equal to the duration of the company.

(2) participation. Shareholders have the right to attend the shareholders' meeting, elect the board of directors of the company and participate in major decisions of the company. Shareholders' willingness to invest and economic benefits are usually realized by exercising shareholders' right to participate.

The right of shareholders to participate in the company's decision-making depends on the number of shares they hold. In practice, as long as the number of shares held by shareholders reaches the actual majority needed to influence the decision-making results, the company can grasp the decision-making control power.

(3) profitability. Shareholders have the right to receive dividends or bonuses from the company by virtue of the shares they hold, and to obtain investment income. Dividends or bonuses mainly depend on the company's profit level and the company's profit distribution policy.

The profitability of stocks is also manifested in the fact that stock investors can obtain the price difference or realize the preservation and appreciation of assets. By buying people at a low price and selling stocks at a high price, investors can profit from the difference. Take the stock of Coca-Cola Company in the United States as an example. If you invest 1000 at the end of 1983 to buy the company's shares, you can sell them at the market price of 1 1 554 before July of 1994, and earn more than 10 times the profit. During the period of inflation, the stock price will rise with the replacement price of the company's original assets, thus avoiding the depreciation of assets. In the period of high inflation, stocks are usually regarded as the first choice for investment.

(4) liquidity. The liquidity of stock refers to the tradeability of stock among different investors. Liquidity is usually measured by the number of shares that can be circulated, the trading volume of shares and the sensitivity of stock prices to trading volume. The more tradable shares, the greater the trading volume, the less sensitive the price is to the trading volume (the price will not change with the trading volume), and the better the liquidity of the stock, and vice versa. The circulation of stocks enables investors to sell stocks in the market and get cash. Through the circulation of stocks and the changes of stock prices, we can see people's judgments on the development prospects and profit potential of related industries and listed companies.

Those industries and companies that attract a large number of investors in the circulation market and keep their share prices rising can continuously absorb a large amount of capital into production and business activities by issuing additional shares, thus achieving the effect of optimizing resource allocation.

(5) Price fluctuation and risk. As the trading object in the trading market, stocks, like commodities, have their own market quotations and prices. Because the stock price is influenced by many factors, such as the company's operating conditions, the relationship between supply and demand, bank interest rates, public psychology and so on, its fluctuation has great uncertainty. It is this uncertainty that may make stock investors suffer losses. The greater the uncertainty of price fluctuation, the greater the investment risk. Therefore, stock is a high-risk financial product. For example, the share price of International Business Machines Corporation (ibm), which dominates the world computer industry, was as high as $ 170 when its performance was extraordinary, but when its position was challenged and its business blunder caused losses, its share price fell to $40. If you buy stocks at a high price at an inappropriate time, it will lead to serious losses.

Stock market terms's Basic Concepts

Weibi:

It is an index to measure the relative strength of buying and selling in a certain period. Its calculation formula is commission ratio = (number of entrusted buyers-number of entrusted sellers)/number of entrusted buyers+number of entrusted sellers × 100%. The value range of entrustment ratio is-100% to+100%. If the "commission ratio" is positive, it means that the buying in the market is strong, and the larger the value, the stronger the buying. On the other hand, if the "commission rate" is negative, it means the market is weak.

Entrust:

The sum of the current purchases of a variety minus the sum of the sales. Reflects the balance of power between buyers and sellers. A positive number means the buyer is stronger, and a negative number means the selling pressure is heavier.

Ratio:

It is an index to measure the relative turnover, that is, the ratio of the average turnover per minute after the opening of the market to the average turnover per minute in the past five trading days. The formula is: volume ratio = total number of transactions/(average turnover per minute in recent 5 days × cumulative opening time of the day (minutes))

When the equivalence ratio is greater than 1, it means that the average transaction per minute on that day is greater than the average of the last five days, and the transaction is hotter than the last five days; When the equivalence ratio is less than 1, it means that the current transaction is not as good as the average level of the past five days.

Opening price:

Refers to the price of the first transaction of the stock after the opening of the day. If there is no transaction price within 30 minutes after the opening of the market, the closing price of the previous day is the opening price.

Closing price:

Refers to the price of the last stock in daily trading, that is, the closing price.

Maximum price:

Refers to the highest transaction price of the day. Sometimes there is only one highest price, and sometimes there is more than one.

Lowest price:

Refers to the lowest transaction price of the day. Sometimes there is only one lowest price, and sometimes there is more than one.

Common stock:

Common stock refers to the shares that enjoy common rights in the company's operation and management, profit and property distribution, and represents the right to claim the company's profits and remaining property after meeting the requirements of full repayment of creditor's rights and the income and claim requirements of priority shareholders. It constitutes the foundation of the company's capital, is a basic form of stock, and is also the largest and most important stock in circulation. At present, all the stocks traded in Shanghai and Shenzhen Stock Exchanges are common stocks. Ordinary shareholders enjoy the following basic rights in proportion to their shares:

(1) Company's right to participate in decision-making. Ordinary shareholders have the right to attend shareholders' meetings, to propose, vote and vote, or to entrust others to exercise shareholders' rights on their behalf.

(2) Profit distribution right. Ordinary shareholders have the right to receive dividends from the company's profit distribution. The dividend of common stock is not fixed, which is determined by the profitability of the company and its distribution policy. Ordinary shareholders must receive fixed dividends from preferred shareholders in order to enjoy dividend distribution rights.

(3) stock options. If the company needs to expand and issue more common shares, the existing common shareholders have the right to buy a certain number of newly issued shares at a certain price lower than the market price according to their shareholding ratio, so as to maintain their original enterprise ownership ratio.

(4) the right to distribute the remaining assets. When the company goes bankrupt or liquidates, if there is any surplus company assets after paying off debts, the rest will be distributed in the order of preferred shareholders first and common shareholders later.

Preferred stock:

It is relative to common stock. Mainly refers to the right to share profits and distribute surplus property prior to ordinary shares.

Preferred stock has two rights:

A. When the company distributes profits, shareholders with preferred shares have priority over shareholders with common shares and enjoy a fixed dividend, that is, the dividend yield of preferred shares is fixed, but the dividend of common shares is not fixed. Looking at the company's profitability, there are many profits and few profits, and there is no difference between profit and loss. The top is not capped, and the bottom is not guaranteed.

B. When the company is dissolved and the remaining property is distributed, the preferred shares are distributed before the common shares.

The price limit system originated from the early foreign securities market. In order to prevent the price from soaring and plunging, curb excessive speculation and appropriately limit the price fluctuation of each stock on the same day, it is a trading system in the securities market. That is to say, the maximum fluctuation range of the trading price in a trading day is a few percent above and below the closing price of the previous trading day, and trading will stop after it exceeds.

The current price limit system of China's securities market was promulgated on February 2003 1996 13, and implemented on February 26, 2006, aiming at protecting investors' interests, maintaining market stability and further promoting market norms. According to the system, except for the first day of listing, the trading price of stocks (including A and B shares) and fund securities in one trading day shall not exceed 10% compared with the closing price of the previous trading day, and the entrustment exceeding the price limit shall be invalid.

The main difference between China's price limit system and foreign systems is that after the stock price reaches the price limit, it does not completely stop trading, and the trading within the price limit or the price limit can continue until the close of the day.