What are open-ended funds? What is a closed-end fund?

Open-end Funds (Open-end Funds), also known as *** with the fund, refers to the fund sponsor in the establishment of the fund, the fund units or shares of the total size of the fund is not fixed, depending on the needs of investors, at any time to investors to sell the fund units or shares, and can be redeemed at the request of investors issued outside the fund units or shares of the fund of a fund mode of operation. Investors can either buy the fund through the fund sales organization so that the fund's assets and size of the corresponding increase, or sell their fund shares to the fund and recover the cash so that the fund's assets and size of the corresponding decrease.

Closed-end funds (Closed-end Funds), refers to the total amount of funds issued and the issuance period in the establishment of the fund has been determined in the issuance of a fixed period of time after the completion of the issuance of the total amount of securities investment funds. Investors in closed-end funds cannot redeem fund shares from the issuer during the life of the fund, and the realization of fund shares must be listed and traded on the stock exchange. The circulation of fund units takes the method of listing on the stock exchange, and investors who buy and sell fund units in the future must go through securities brokers to conduct bidding transactions on the secondary market.

Expanded Information:

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There are three basic principles to be grasped when investing in open-ended funds.

First, one must know what one's investment objectives are, how long the term is, and how much investment risk one can take. Have a proper understanding and judgment of the investment styles, past business performance and rate levels of different fund management companies.

Secondly, do not have unrealistic expectations of its rate of return, as a certain degree of risk always exists.

Thirdly, open-ended funds are medium-to-long-term investments, an effective way to share the long-term growth of the capital market, and are not suitable for short-term speculation. Evaluating the performance of a fund should be examined over a longer period of time, and only a fund that stands the test of time is really worth investing in. Short-term frequent subscription and redemption, not only investment costs are high, and it is difficult to get the expected return.

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