Fund refers to an investment tool paid by investors, managed by fund managers, and managed by fund custodians. It is an indirect securities investment method. According to the investment object, it can be divided into currency funds, bond funds, mixed funds, and stock funds; according to the investment philosophy, it can be divided into active funds and passive funds.
In the definition of a fund, there are three roles: the investor who makes the money, the fund custodian (the bank) who manages the money, and the fund manager (often called the fund manager) who makes investment decisions. In fact, there is a fourth role: the fund company.
For example, Methyl Gold issued a fund A, and investors felt that it was not bad, so they began to invest some money to buy it, so as to obtain a certain fund share. The money will enter the custodian bank that cooperates with the fund company, and the fund manager will take care of it according to the established investment strategy.
Investors pay, we can understand; fund managers make investment decisions, we can also accept, but why do we need to entrust the money to the bank? Can’t it be placed directly in the hands of fund companies or even fund managers? Of course not, and the reason is very simple: guard yourself against theft.
If you are responsible for both the preservation of the money and where the money goes (what kind of investors to buy), will you be at ease if you collect the money in the hands of one person? It’s like a safe at home. It’s not enough to tell others the password, and you have to give the key to both hands. What’s the use of the safe?
Therefore, you should put the money in the custodian bank, and separate the person who uses the money from the person who keeps the money, so as to ensure the safety of the funds. After the fund manager makes an investment decision, it reconciles with the custodian bank every day for settlement. It may be a bit of a hassle, but it’s safe enough.
According to the different investment objects, funds can be divided into monetary funds, bond funds, mixed funds, and stock funds.
The investment varieties of “money funds” are mainly bank time deposits, large-denomination certificates of deposit, bond repurchase, and central bank bills within one year;
The “bond fund” mainly invests in bonds, such as government bonds, corporate bonds, financial bonds, etc. The proportion of bonds in the portfolio is higher than 80%;
“Stock Fund” mainly invests in stocks, and the proportion of stock positions should be greater than 80%, so the volatility is relatively large;
“Mixed funds” can invest in money market, bonds, stocks and other varieties, which can be understood as a hodgepodge.
According to different investment strategies, it can be divided into active funds and passive funds.
An “active fund” refers to a fund that seeks to outperform the market, that is, to outperform the market by taking the initiative to outperform the market through fund managers. Therefore, this kind of fund is very dependent on the level of the fund manager. It can be said that buying an active fund is buying a fund manager.
“Passive funds” are funds that do not actively seek to outperform the market. The investment object is generally a constituent stock of an index, which almost completely replicates the index, so it is also called an index fund. It can be said that, except for index funds, all other funds are active funds.