I. Division according to the investment object of the fund
Different according to investment object, we can divide fund for stock fund, bond fund, currency fund and mixed fund.
1. Equity funds
Let’s talk about equity funds first. According to the China Securities Regulatory Commission on the fund classification standard, more than 80% of the fund assets invested in stocks for equity funds. Equity funds have a high proportion of exposure to stocks, so they have the highest risk of any fund type, but also the highest long-term returns.
Have a lot of small associate to ask small flourishing: I in the fund supermarket that refers to flourishing, often can see the name of a lot of stock fund contains “value”, “growth”, “balance”, what meaning are these words?
In fact, these words represent the nature of the stocks the fund invests in.
In simple terms, we call stocks that are undervalued value stocks and those with good growth prospects and fast profit growth stocks. So, focus on value stock investment is value stock fund, and focus on growth stock investment is growth stock fund.
What about balanced equity funds, which are those that invest partly in value stocks and partly in growth stocks. Because the nature of investing in stocks is not the same, so the risks are different. According to the risk degree from low to high, the risk of value stock fund is the lowest, the risk of balanced stock fund is in the middle, and the risk of growth stock fund is the highest, but its long-term return is also the highest.
In addition to the nature of the stock will be divided according to the industry and subject to distinguish the stock fund. For example: consumer industry fund, Internet industry fund, low carbon environmental protection theme fund and so on. There are also classified according to the scale of the stock, such as the market fund, in the fund and so on, small prosperous here is no longer listed one by one.
2. Money fund
Then finish finish the most risky equity funds, let’s talk about the least risky money funds. A money market fund is a fund that invests in the money market. What is the money market?
Generally speaking, we call the financial market whose investment term is less than one year money market. The investment varieties mainly include short-term bank deposits, short-term bonds issued by the state and enterprises within one year and so on. These investment varieties can better guarantee the security of principal, but also determine that the risk and long-term return of money fund in all kinds of funds are the lowest.
The return of money funds will be higher than that of bank demand deposits at the same time, and the current rate of return is generally 3%-4% annually. Because the investment is within a year of the financial products, the liquidity of the money fund is very strong, most of the money funds support the day of redemption to the account.
3. Bond funds
Before we talk about bond funds, let’s talk about what bonds are. Bonds are a bit like ious between friends when they borrow money. The borrower writes on the IOUS when it will be paid back and how much interest will be charged. But unlike ious, bonds are issued by institutions to raise funds. Depending on the issuing institution, bonds are subdivided into government bonds, financial bonds, corporate bonds and so on.
According to the classification standard of the Securities Regulatory Commission, more than 80% of assets invested in bonds for bond funds. Generally speaking, the long-term income of bond funds is higher than that of money funds. Compared with stock funds, bond funds have lower returns, but when the stock market has violent fluctuations, the returns of bond funds are relatively stable.
4. Hybrid funds
Take a look at hybrid funds. Hybrid funds can invest in stocks as well as bonds and money markets, and there is no strict limit on the proportion of stocks and bonds that can be invested. This makes hybrid funds very flexible, allowing managers to adapt their investment strategies to changes in the market. When the stock market rises, you can increase the intensity of stock investment and reduce the proportion of bond allocation to obtain greater investment returns. When the stock market falls, it can be reversed by increasing the proportion of bond investment to avoid the high risk of the stock market.
Generally speaking, the risk of hybrid funds is lower than that of equity funds, and the long-term return is higher than that of bond funds. More suitable for risk tolerance is general, but hope to gain in the stock market can be a partner.
All right, the four categories of funds that you remember by what you invest in? Here, stock funds that invest in the stock market are the most risky, followed by hybrid funds with unlimited investment ratios, followed by bond funds, and money funds are the least risky. I hope you understand the investment risks of different funds before investing, and then choose according to your risk tolerance and investment goals.
Ii. Division according to fund investment strategy
In addition to classifying according to the investment object, we can also classify according to the investment strategy, mainly divided into passive funds and active funds.
Passive fund refers to index fund commonly, what is that index? There are many stocks in the stock exchange. The price of each stock changes at any time. Some go up, some go down. The index is a reference index that can reflect the overall rise and fall of the stock market in a timely manner. For example, the csi 300 index is compiled by selecting 300 stocks from the Shanghai and Shenzhen stock markets. The stocks in the index are called index constituents.
Finish index, understand index fund is much easier. An index fund is like a shadow of an index. It takes a specific index as its target, builds a portfolio by buying the components of the index, and tries to follow the index by tracking it. For example, boshi Shanghai and Shenzhen 300 index A, is reference to the Shanghai and Shenzhen 300 index to invest in the fund.
An ETF is also an index fund that trades on an exchange. Different from other index funds, THE trading mechanism of ETF is very complex, and the capital threshold is relatively high. In order to make IT easy for ordinary investors to invest in ETF, fund companies have copied the portfolio of ETF and launched ETF linked funds.
In contrast to passive fund, active fund is a fund that seeks to achieve performance beyond the market. It requires the fund manager to conduct in-depth research on the securities market and actively select stocks and bonds to determine the portfolio. Because the human factor of active fund is more than that of passive fund, it is necessary to pay attention to the selection of good fund managers and fund companies, which we will discuss in the following course.
Iii. Regional division of fund investment
We still can press the region that investment object place is in, divide the fund into the A share fund that invests domestic securities market, and invest foreign market QDII fund. QDII is an acronym for Qualified Domestic Institutional Investor. Simply put, QDII funds are domestic financial investment institutions approved by the CSRC to invest our money in the overseas capital market. It is an investment choice for overseas asset allocation, which can better spread the risk.
Four, according to the fund trading place division
In addition to the above three classification methods, we can also divide funds into over-the-counter funds and exchange funds according to the different trading places of funds. The “exchange” refers to the securities exchange market. An exchange-traded fund is a fund that needs to open a stock account to buy stocks on the stock exchange. The biggest difference between otc funds and exchange funds is that you do not need to open a stock account to buy, such as those funds you see on the Wealth APP, belong to otc funds. Xiao Wang suggests that those who are new to funds can start buying from over-the-counter funds, because over-the-counter funds are not only rich in variety, easy to operate, but also have the advantage of low initial purchase amount.