1. Fund:
A fund is a pool of funds jointly funded by investors, managed and operated by professional institutions. Fund companies invest these funds in different financial instruments, such as stocks, bonds, money market instruments, etc., to achieve common investment goals.
2. Fund type:
According to investment strategy and asset class, funds can be divided into various types, including stock funds, bond funds, hybrid funds, index funds, money market funds, etc. Each type of fund has different risk-return characteristics and applicable objects.
3. Risks and benefits:
Fund investment involves a trade-off between risk and return. Stock funds typically have higher risk and return potential, while money market funds are more conservative and stable. Investors should choose the type of fund that suits them according to their risk tolerance and investment objectives.
4. Net worth and unit net worth:
A fund's NAV represents the residual value of the fund's assets minus its liabilities. Unit net value (Net Asset Value, NAV) represents the net value of each fund share. Unit net value is an important indicator for calculating fund investment income and buying and selling prices.
5. Fund manager:
A fund manager is a professional responsible for formulating and executing a fund's investment strategy. They study market trends, select investment targets and adjust investment portfolios in pursuit of the best return on investment.
6. Buying and selling of fund shares:
Investors can participate in the fund by purchasing fund shares. Fund shares can be bought and sold at fund companies or stock exchanges. Subscription fees need to be paid when buying fund shares, and redemption fees may need to be paid when selling fund shares.
7. Fund Rating:
Fund rating agencies rate and rank funds and provide ratings based on past performance and other factors. These ratings can be used as a reference for investors to choose funds, but they do not represent future performance.
8. Purchase:
Subscription refers to the process by which investors purchase fund shares. Investors submit subscription requests to fund companies or sales agencies, and pay the corresponding subscription fees or subscription amounts. According to the purchase request, the fund company will calculate the purchase shares according to the net value of the fund, and then distribute them to investors.
9. Subscription:
Subscription refers to the purchase of newly issued fund shares by investors from fund companies during the period of new fund issuance. Subscription usually requires investors to fill out a subscription application form and pay subscription money. If the subscription application for a new fund exceeds the number of shares available for subscription, the fund company may distribute the fund shares proportionally.
10. Redemption:
Redemption refers to the process in which investors sell the fund shares they hold for cash. Investors submit a redemption request to the fund company or sales agency. Within a certain period of time, the fund company will calculate the redemption amount based on the net value of the fund and return the redemption money to the investor.
11. Dividend:
Dividend distribution refers to the behavior of the fund company to distribute the income obtained from the fund investment to the fund share holders in a certain proportion. Dividends can be distributed to investors in the form of cash, or can be reinvested to increase the fund shares held by investors.
12. Open-end Fund:
Publicly offered funds refer to funds that can issue and redeem fund shares to the public at any time. Investors can buy or redeem shares of this type of fund at any time according to their own needs, and the size of the fund will increase or decrease according to the buying and selling behavior of investors.
13. Closed-end Fund:
A closed-end fund refers to the issuance of a certain number of fund shares within a specific fundraising period, after which subscription and redemption are no longer accepted. Investors need to buy and sell through the stock exchange, and decide to buy or sell fund shares according to the market price.
14. ETF Fund (Exchange Traded Fund):
ETF fund is a kind of fund that can be listed and traded on the stock exchange. It not only has the trading flexibility of closed-end funds, but also can be traded in real time like stocks. Investors can participate by buying or selling ETF fund shares.
15. Fund Conversion:
Fund switching refers to the process by which an investor converts the shares of one fund into shares of another fund. Investors can submit a fund switching request to the fund company or sales agency, and convert the shares of the existing fund into the shares of the target fund according to a certain ratio. Fund switching usually does not involve cash transactions, but directly converts the fund shares held.
16. Transfer-In-Custody Conversion:
Custody transfer refers to the process in which an investor transfers the shares of a fund held from one custodian to another custodian. This conversion usually occurs when investors change custodians or adjust asset allocation, etc. Investors need to apply to the current custodian for a escrow switch, and complete the transfer in accordance with the specified procedures and requirements.
17. Conversion Ratio:
The share conversion ratio refers to the ratio of investors converting the shares of the existing fund to the shares of the target fund when switching funds. The conversion ratio is usually determined according to the net value of the fund and the time when the conversion application is submitted. Conversion ratios may vary between funds.
18. Return
It refers to the profit or return obtained by an investment within a certain period of time. In fund investment, income refers to the appreciation of the fund shares held by investors within a certain period of time, usually expressed in currency.
19. Return Rate
The rate of return (Return Rate) refers to the proportional relationship between the return on investment and the principal of the investment. Yield can be used to measure how good or bad an investment is performing. In fund investment, the rate of return can be a simple rate of return (Simple Return), that is, the ratio of the investment return to the investment principal or the initial net value of the fund is calculated; it can also be an annualized rate of return (Annualized Return), that is, the simple rate of return Yield adjusted for a one-year time horizon.
20. 7-Day Yield
7-Day Yield (7-Day Yield) is a common measure of fund return rate, which represents the return rate of the fund in the past seven natural days. The seven-day return is usually given in annualized form. The calculation method is to add up the returns of the past seven natural days and adjust it according to the time span of 365 days in a year.
The seven-day return is mainly used to calculate the return rate of low-risk investment tools such as money market funds and short-term bond funds. It can reflect the short-term performance and return level of the fund, and is convenient for investors to compare and choose.
21. Sales service fee (Sales Load)
Sales service fee (Sales Load): Also known as front-end sales fee or subscription fee, it is the fee that investors need to pay to sales agencies or brokers when buying funds. The sales service fee is usually calculated at a certain percentage (such as 1%, 2%, etc.) and charged according to the investment amount.
22. Management Fee
Management Fee: It is the fee that the fund company needs to pay for managing the fund. The management fee is usually calculated in the form of an annualized ratio, and is charged according to a certain percentage of the fund's net assets, generally between 0.5% and 2%.
23. Custodian Fee
Custodian Fee: It is the fee charged by the fund custodian for providing asset custody and settlement services. The custody fee is usually calculated in the form of an annualized ratio, and is charged according to a certain percentage of the fund's net assets, generally between 0.1% and 0.3%.
24. Subscription/Redemption Fee
Subscription/Redemption Fee (Subscription/Redemption Fee): Refers to the fees charged by fund companies when investors subscribe (purchase) or redeem (sell) funds. Subscription and redemption fees are usually calculated in a certain percentage and charged according to the investment amount or redemption amount. These fees can be used to suppress frequent trading behavior (such as frequent buying and selling in the short term) to maintain the long-term investment strategy and fairness of the fund.
25. Conversion Fee
Conversion Fee (Conversion Fee): refers to the fee that investors need to pay when they convert one type of fund they hold into another fund. The conversion fee is usually calculated as a certain percentage and charged according to the conversion amount. The existence of switching fees is mainly to reduce the frequent switching of funds, maintain the stability of fund products and the rationality of long-term investment.
26. Trading Commission
Trading Commission (Trading Commission): Refers to the fees that investors need to pay to brokers or stock exchanges during the fund transaction process. Transaction commissions are usually calculated in a certain percentage and charged according to the transaction amount. Transaction commissions generally apply to off-exchange transactions of open-end funds, including subscription and redemption.