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What is securities investment fund

Securities investment fund, that is, in a narrow sense, investment instrument in which the fund share is raised through the sale of fund share to form an independent fund property, managed by the fund manager, managed by the fund trustee, and invested in securities in the way of asset portfolio, and the holders of the fund share take the income and bear the risk according to their shares.


1. Definition

1.1 Securities investment funds pooled funds for securities investment in the form of fund-raising. The main way to raise funds is to issue fund bonds to investors, pooling scattered small funds of investors into a larger fund, then invest in stocks, bonds, etc.

1.2 Securities investment fund uses trust relationship for securities investment. Trust, is to entrust one'sproperty to a trusted third party. And this third party manages and uses the property in accordance with one's own requirements. Investors entrust the property to a professional institution to invest in securities, which is the trust of the institution. Then the agency manages and invests entirely in accordance with the requirements of investors. And then distribute the proceeds to investors. Obviously, this is a trust act.

1.3 Securities investment fund is an indirect way of securities investment. After investors buy the share of the fund, the fund invests in the securities market with its own property, obviously the securities investment of the investor is indirect. Therefore, investors cannot participate in the decision-making and management of companies that issue securities.


2. Origin

There is no agreement on exactly when and where the earliest funds were born. It is said that the private trust investment fund, founded by King William I of the Netherlands in 1822, may be the earliest. It is also said that Ketwich, a Dutch businessman, first put this into practice in 1774, when he founded a trust fund.

The British Overseas and Colonial Government Trust of 1868 is generally regarded as the world's first fund (closed-end fund); The Massachusetts Investment Trust, founded in 1924 in the United States, was the world's first open-ended fund.


3. Classification

3.1 Classification by fund organization: Contractual Type Funds, Corporate Type Funds

3.2 Classification by mode of operation of the Fund: Closed-end Funds, Open-end Funds

3.3 Classification by investment objective: Growth Fund, Income Fund, Balanced Fund

3.4 Classification by subject matter of investment: Bond Fund, Stock Fund, Money market Fund, Hybrid Fund

3.5 Classification by investment concept: Active Fund, Passive Fund (index fund)

3.6 Classification by source and flow of capital: Domestic funds, international funds, offshore funds, overseas funds

3.7 Other special types: ETF(Exchange-Traded Fund), LOF(Listed Open-Ended Fund), QDII Fund

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