It’s Fund buying risk?
Securities investment funds are concentrated funds then everybody’s major investment in stocks, bonds, money market instruments, such as financial products, the prices of financial products is subject to fluctuations, even though the Fund’s investments will normally be taken decentralized portfolio investment, but such basic price fluctuations caused by the base the overall fluctuations in the value of the assets is not completely eliminated, so the purchase of the Fund does not mean that the Fund’s income is determined, in other words there is a certain degree of risk. The two main risks include the following :
The price fluctuation risks. The investment will be subject to the price volatility of the Fund’s net worth will also therefore fluctuations occur. The price of closed-end funds with the Fund’s net worth is between related to the general fundamental changes in the same direction, if the fund net serious decline in the general price of the closed-end funds will decrease. And the open-end fund share price is the net value of the Fund, an open-end fund purchase and redemption prices will drop as the net down. The Fund will purchase fund faced the risk of price changes. If the price fell to fund the purchase cost, without taking into account factors affecting dividends circumstances, holders of the fund will share the losses.
Liquidity risk. Closed-end funds for the purchase were run, when to sell fund, may be facing a certain price to be sold under selling price risk; In addition, the open-end fund holders, if faced huge redemption, fund managers may be deferred payment of redemption money. affected holders for the funds.
Overall, however, the risk of buying funds than buying shares directly to the risk of small, mainly because of the dispersal of investment funds does not arise solely by the stock price fluctuated wildly suffered great loss. The volatility of the Fund and the entire market is close to that for ordinary investors to better evade the stock risk and achieved average market return
Tags：Global fund open end fund holders