What Are the Different Types of Corporate Bond Funds?

Securities investment funds refer to the formation of independent fund assets through the use of funds raised through the sale of fund shares, which are managed by the fund manager and managed by the fund custodian, and invest in securities in the form of a portfolio. Risky investment vehicle.

Securities Investment Funds

(Collective securities investment method)

Securities investment funds refer to the formation of independent funds raised through the sale of fund shares.

There is no consensus on when and where the earliest funds were born. Some people think that the private trust investment fund founded by King William I of the Netherlands in 1822 may be the earliest. Some people even think that in 1774, the Dutch businessman Ketwich first put into practice and founded a trust fund.

It is generally believed that the British "Overseas and Colonial Government Trust Fund" in 1868 was the world's first fund (closed fund); and the "Massachusetts Investment Trust Fund" born in the United States in 1924 was the world's first open-ended fund .

It was produced after the promotion of the industrial revolution in the late 18th and early 19th centuries, and then flourished in the United States, which has swept the world.

The names of investment funds differ in different countries. The United Kingdom and Hong Kong

According to the meaning of securities investment funds, we can see that its nature is reflected in the following aspects:

(1) Securities investment funds are a collective investment system.

The securities investment fund is a kind of integrated portfolio investment method that accumulates a large amount of funds from a large number of investors and forms an investment management company for professional management and operation. Under this system, the operation of funds is subject to multiple oversights.

(2) Securities investment funds are a form of trust investment.

It is the same as a general financial trust relationship. It has three principals: a trustee, a trustee, and a beneficiary. There is a trust contract between the trustee and the trustee. But securities funds, as a form of financial trust business, have their own characteristics. For example, if there is an indispensable custodian institution among the principal parties involved in the investment of securities, it cannot be the same institution as the trustee (fund management company), and the fund custodian is generally a legal person; the fund manager does not treat each investor The funds are used separately, but they are aggregated to form a huge amount of funds and then operated.

(3) Securities investment funds are financial intermediaries.

It exists between investors and investment objects, and plays the role of converting investors' funds into financial assets and reinvesting in financial markets through specialized institutions, thereby increasing the value of monetary assets. The manager of a securities investment fund is responsible for the operation and management of the funds invested by the investor, and must determine the funding direction in accordance with the requirements of the contract (or contract) to ensure the safety of investors' funds and maximize returns.

(4) The securities investment fund is a securities investment tool.

The certificates it issues are fund securities (or beneficiary certificates, fund units, and fund shares), together with stocks and bonds, which constitute three major types of securities. The investor completes the investment behavior by purchasing fund coupons, and shares the investment income of the securities investment fund with it, and bears the investment risk of the securities investment fund.

Fund participants generally include three types, namely fund parties, market service agencies, and industry self-regulatory organizations.

1. Fund parties: share holders (ie investors), fund managers, fund custodians (generally commercial banks)

2. Market service agencies: fund sales agencies, fund registration agencies, law firms and accounting firms

3. Supervision and self-regulatory organizations: fund supervisory agency (CSRC), fund self-regulatory agency (fund industry association)

As a modern investment tool, the fund has the following three characteristics:

1. Collection investment. The fund is an investment method: it cleverly collects scattered funds and gives them to professional institutions to invest in various financial instruments in order to increase the value of assets. The fund requires a minimum investment limit. Investors can determine the purchase amount according to their economic capacity. Some funds do not even limit the size of the investment amount and calculate the distribution of income based on the share. Therefore, the fund can absorb the most idle social funds , Set armpits into Qiu, Huicheng into a huge investment funds. When participating in securities investment, the stronger the capital, the more obvious the advantages, and the comparative advantage of large investment in reducing costs may be enjoyed, so as to obtain the benefits of economies of scale.

2. Diversify risk. Reducing risks and improving returns with a scientific investment portfolio is another major feature of funds. In investment activities, risks and returns always coexist. Therefore, "you cannot put all your eggs in one basket", which is the motto of securities investment. However, in order to diversify investment assets, a certain amount of capital strength is required. For small investors, it is difficult to do this because of limited funds, and funds can help small and medium investors solve this difficulty. The fund can make a scientific combination within the investment scope stipulated by the law with its strong funds, diversify its investment in a variety of securities, and use the public ownership of huge funds and numerous investors to reduce the investment risk faced by each investor. On the one hand, it also uses the complementarity between different investment objects to achieve the purpose of diversifying investment risks.

3 Professional financial management. The fund implements an expert management system. These professional managers are specially trained and have rich experience in securities investment and other project investment. They are good at using the close connection between the fund and the financial market, and using advanced technical methods to analyze various information materials, they can make more accurate predictions of the price movement trends of various varieties in the financial market, to avoid errors in investment decisions, Investment success rate. For small and medium investors who do not have time or are not familiar with the market and are not capable of specializing in investment decision-making, investing in funds can actually obtain experts in market information, investment experience, financial knowledge and operating techniques. Has the advantage to avoid the failure of blind investment as much as possible.

I. Classification by Fund Organization

1.

The difference between securities investment funds and stocks and bonds:

1. The economic relations reflected are different. Stocks reflect ownership relationships, bonds reflect creditor's rights and debt relationships , and funds reflect trust relationships , with the exception of corporate funds.

2. The investment direction of raising funds is different. Stocks and bonds are direct investment vehicles. The funds raised are mainly invested in industry, while funds are indirect investment vehicles. The funds raised are mainly invested in financial instruments such as securities.

3. Different levels of risk. The direct returns of stocks depend on the operating efficiency of the issuing company, which is highly uncertain, and investing in stocks has greater risks. The direct return of bonds depends on the bond interest rate, which is generally determined in advance and the investment risk is relatively small. The fund mainly invests in marketable securities, and the investment options are flexible and diversified, so that the fund's returns may be higher than bonds, and the investment risk may be less than stocks. Therefore, the fund can meet the needs of individuals or institutions that cannot or should not directly participate in stock and bond investments.

Funds are generally raised through four steps: application, approval, sale, and fund contract entry into force.

issued

The issuance of funds refers to the investment fund management company's

The development of China's fund industry is still in its infancy, and the establishment of the fund is the first step in the operation of the fund. Therefore, in order to ensure the normal management and operation of the fund after its establishment, it is necessary to strictly control the establishment of the fund and implement strict "approval system".

1. Fund duration

China's "Interim Measures for the Administration of Securities Investment Funds" stipulates that the duration of a closed-end fund must not be less than 5 years. When the following conditions are met, it can be expanded or renewed upon review and approval by the China Securities Regulatory Commission:

(1) The annual rate of return is higher than the average rate of return of the national fund.

(2) The fund custodian and fund manager have not committed any major violations of laws and regulations within three years.

(3) The fund holders' meeting or fund custodian agrees to expand or renew.

(4) Other conditions stipulated by the China Securities Regulatory Commission.

When applying for fund expansion or renewal, relevant documents shall be submitted in accordance with the requirements of the China Securities Regulatory Commission.

For open-end funds, unless there is a situation that causes the fund to terminate, the fund will persist for a long time.

2. Changes in funds

The following situations are changes in the fund, but must be reported to the competent authority for approval beforehand:

(1) Change the subscription method, trading method and calculation method of net asset value of fund bonds.

(2) Fund expansion or renewal.

(3) Change of fund manager or fund custodian, etc.

3 Termination of the fund

Under the following circumstances, the fund should be terminated and closed with the approval of the competent authority:

(1) The closing period of the fund has expired and has not been approved for renewal.

(2) Fund holders who have not been accepted by the new fund manager or fund custodian due to the retirement of the original fund manager or the original fund custodian, or have more than a consecutive number of working days as specified in the fund prospectus during the fund's lifetime The number is less than 100 people or the net asset of the fund is less than 50 million yuan.

(3) Terminated by a vote of the fund holders' meeting.

(4) It was ordered to terminate by the China Securities Regulatory Commission for major violations of laws and regulations.

(5) The merger or cancellation of funds caused by the change of investment direction.

(6) Laws, regulations or other circumstances permitted by the CSRC.

4 Liquidation of funds

When the fund is terminated, a liquidation team must be formed to liquidate the fund assets. The liquidation results shall be reported to the China Securities Regulatory Commission for approval and announcement.

means of transaction

Fund trading methods vary depending on the nature of the fund. The closed-end fund has a closed period requirement, and the size of the fund is stable during the closed period. It does not accept investors' purchases or redemptions by investors. Therefore, in order to meet the needs of investors, the closed-end fund Usually apply for listing on the stock exchange, the transaction method is similar to stocks, that is, transfer transactions between investors. An open-ended fund is open because of its size, and its size changes during the life of the fund. In addition to the regulations that allow the fund to be established for three months from the date of establishment, according to the fund contract and prospectus, only In addition to accepting the purchase without redemption, if there is no special reason for the rest of the time, investors should accept the purchase and redemption every trading day. Therefore, the open-end fund's trading method is OTC trading between investors and fund managers or their agents. Investors can go to the business outlets of fund management companies or their agents to buy and sell fund bonds. Purchase and redemption of fund units at any time.

Closed-end fund trading and trading prices

(1) Closed-end fund listing application and approval

As mentioned earlier, the closed-end fund's trading method is listed on the stock exchange. Therefore, after the establishment of the closed-end fund, it should promptly apply to the stock exchange for listing. The main contents of the listing application and the approval of the competent authority include: the management and investment of the fund; the listing feasibility report submitted by the fund manager; the adequacy of information disclosure; whether the internal mechanism is complete and whether the fund constitution and the trust deed can be implemented Wait. The above materials must be true and reliable without major omissions.

(2) Trading rules of closed-end funds

The trading of fund units follows the "three public" principle of "openness, fairness, and justice" and the principle of "priority of price and priority of time".

Carry out centralized paperless transactions in units of standard lots, and the computer will automatically match them to track transfers.

The price of the fund unit is based on the net asset value of the fund unit, which fluctuates under the influence of market supply and demand, and the market price is immediately revealed.

The transaction cost of fund units is relatively low.

(3) Factors affecting price changes of closed-end funds

The relationship between the unit's net assets and market supply and demand is the main factor affecting the market price of closed-end funds, but other factors can also cause its price to fluctuate.

The net asset value of the fund unit. The net asset value of a fund unit refers to the value actually represented by each fund unit of a fund at a certain point in time, and is the intrinsic value of the fund unit. Since the net asset value of a fund unit directly reflects the operating performance of a fund and the growth relative to other securities, at the same time, because the net asset value of a fund unit is the actual value compensation that investors can obtain when the fund is liquidated, the fund unit Net asset value constitutes the most important factor affecting the market price of closed-end funds. In general, the market price of a fund unit should fluctuate around the net asset value of the fund unit.

Market supply and demand. Since the closed-end fund has a stable fund size during its existence period, the existence of market supply and demand conditions has an important effect on the trading price of the fund. Generally speaking, when the market demand increases, the transaction price of the fund unit rises; on the contrary, it decreases, so that the price of the fund is often traded at a premium or discount to its net worth.

Market expectations. The market is expected to influence the price of the fund by affecting the supply and demand relationship. When investors expect the stock market to be bullish, or the fund's favorable policies will be introduced, or the fund manager's operating level will increase, the fund's net asset value will increase. Or when the fund market will "downsize" and so on, it will increase the demand for funds and cause the price of the fund to rise; otherwise, it will reduce the demand for funds and cause the price of the fund to fall.

manipulation. Just like the stock market, there is also a phenomenon of manipulation in the fund market. Because the "dish" of closed-end funds is established, large capital strength households often use artificial enlargement of trading volume or long-term one-way operations to achieve the purpose of influencing the market supply-demand relationship and trading prices and profit from them.

The emergence of open-end funds and fund liquidation. Because the open-end fund's trading price is completely determined by the fund's net asset value, when the open-end fund, which is also a securities investment fund, appears, the investment of closed-end funds will gradually become more rational, and the fund's trading price will gradually match the fund's value. Net asset value tends to be consistent. Similarly, as the duration of the closed-end fund gradually comes to an end and the termination of the liquidation period of the fund, the trading price of the fund will gradually return to its level of net asset value.

Trading and trading prices of open-end funds

(1) Subscription, purchase and redemption of open-end funds

During the period when an investor raises funds in an open-end fund, the process of buying fund units before the fund is established is called subscription. Usually the subscription price is the face value of the fund unit (1 yuan) plus a certain selling cost. When the fund is first issued, investors generally have preferential rates. When subscribing for a fund, an investor should fill in a subscription application form at the fund's point of sale, pay the subscription amount, and the registration agency should go through the relevant procedures and confirm the subscription. Only after the open-end fund is announced, the fund can enter daily purchases and redemptions after a prescribed date.

After the fund is established, the process by which investors apply to purchase fund units through a fund management company or its sales agency is called a purchase. When an investor applies for a purchase, he should fill out a purchase application and pay the purchase amount. The amount of fund units purchased is calculated based on the net asset value of the fund units on the date of purchase.

In order to realise their fund assets, the process of selling handheld fund units to fund managers at a certain price and recovering cash is called redemption. The redemption amount is calculated based on the net asset value of the unit funds on that day.

(2) Restrictions on purchase and redemption of open-end funds

According to the relevant regulations and the provisions of the fund contract, the purchase and redemption of open-end funds mainly have the following restrictions:

Fund purchase restrictions. After publishing the prospectus and other legal documents, the fund began to recruit legal investors. According to the open-end fund schemes disclosed by domestic fund management companies, the initial fundraising scale generally has an upper limit. During the first fundraising period, if the subscription share on the last day plus the subscription share before that exceeds the prescribed upper limit, investors can only make a fair share in proportion and cannot subscribe in full. In addition to the subscription price of open-end funds, a minimum subscription amount is usually required. In addition, according to the relevant laws and provisions of the fund contract, there are certain restrictions on the total share of the fund held by a single investor, such as not exceeding 10% of the total share of the fund.

Fund redemption restrictions. The restrictions on redemption of open-end funds are mainly restrictions on large-scale redemptions. According to the Procedures for Piloting Open-ended Securities Investment Funds, during a single open day of an open-end fund, when the fund s net redemption application exceeds 10% of the fund s total shares, it will be considered a huge redemption. When a large-scale redemption application occurs, the fund manager may postpone the remaining redemption applications on the premise that the redemption ratio accepted on the day is not less than 10% of the total fund share. That is to say, the fund manager can grant redemption according to the situation, or refuse to redeem this part. The rejected redemption part can be postponed to the next open day, and based on the net asset value of the day Calculate the redemption amount. Of course, when a large amount of redemption occurs and the payment is postponed, the fund manager should notify the fund investor by mail, fax, or other methods specified in the prospectus, within the time specified in the prospectus, and explain the relevant processing methods. Announcement on relevant media. The time for notification and announcement shall not exceed 3 securities trading days.

(3) Purchase and redemption prices of open-end funds

The trading price of an open-end fund is the purchase and redemption price. The purchase and redemption prices of open-end funds are based on the net value of each fund. The net value of the fund plus or minus the necessary fees constitutes the purchase and redemption price of open-end funds.

The fund purchase price refers to the price formed by the net asset value of each fund unit on the day of the fund purchase application date plus a certain percentage of the subscription fee. It is the actual amount that the investor will pay to purchase each fund. The redemption price of a fund refers to the price formed by deducting a certain percentage of the redemption fee from the net asset value of each fund unit on the day of the fund's redemption application date. .

Securities investment fund income is a variety of income generated during the operation of fund assets, mainly including interest income, investment income and other income. Changes in asset prices caused by the valuation of fund assets are included in the current profit and loss as gains and losses from changes in fair value.

The profit distribution of securities investment funds refers to the operating results of the funds in a certain accounting period. Profit includes the net amount of income minus expenses, gains and losses directly included in current profits, etc., and is also called fund income. After obtaining investment income and deducting expenses, the securities investment fund must distribute the profits to the beneficiaries. There are usually two ways to distribute fund profits (income): one is to distribute cash, which is the most common distribution method; the other is to distribute fund shares, that is, the net profit to be distributed is converted into an equal amount of new fund shares to beneficiaries.

According to the "Administrative Measures for Securities Investment Funds", the income distribution of closed-end funds must not be less than once a year, and the annual income distribution ratio of closed-end funds must not be less than 90% of the fund's realized annual income. Closed-end funds generally use cash dividends.

The fund contract of an open-end fund shall stipulate the maximum number of fund profit distributions per year and the minimum proportion of fund profit distribution. Open-end fund dividends are divided into cash dividends and dividend reinvestment into fund shares. According to regulations, the distribution of fund profits should be in cash. The holders of fund units of open-end funds may choose to convert the distributed cash profits into fund units in accordance with the relevant fund unit subscription agreement of the fund contract; if the fund unit holder does not make a selection in advance, the fund manager shall pay cash .

The China Securities Regulatory Commission has special regulations on the profit distribution of money market funds . Article 9 of the "Interim Provisions on the Management of Money Market Funds" states: "For money market funds that are quoted daily at face value, the benefit distribution method can be agreed in the fund contract as dividend reinvestment, and daily income distribution should be made. "The" Notice on Money Market Fund Investment and Related Issues "issued by the China Securities Regulatory Commission on March 25, 2005 stipulates:" The fund shares purchased on the same day will enjoy the fund's distribution rights from the next working day, and the funds redeemed on the same day. Shares do not want to have fund distribution rights from the next working day. "Specifically, when a money market fund distributes its profits every Friday, it will distribute Saturday and Sunday's profits at the same time; every Monday to Thursday, Only the profit of the day is distributed. Investors and fund shares purchased or transferred on Friday do not enjoy Friday, Saturday, and Sunday profits; investors and fund shares redeemed or transferred out on Friday enjoy Friday, Saturday, and Sunday. profit.

A securities investment fund is an investment tool that centralizes funds, manages experts, diversifies investment, and reduces risk. However, investors may still face risks when investing in the fund. The risks of securities investment funds are:

Market risk. Funds are mainly invested in the securities market. Investors purchase funds. Compared to stock purchase, due to the ability to effectively diversify investments and use the advantages of experts, it may be beneficial to control risks. Although diversified investment can eliminate non-systematic risks from individual companies to a certain extent, it cannot eliminate systemic risks in the market. Therefore, when the stock market price fluctuates due to various factors such as economic factors, political factors, etc., it will lead to changes in the fund's income level and net worth, thereby bringing risks to fund investors.

Management ability risk. As a professional investment institution, fund managers do have certain advantages in risk management over ordinary investors. For example, they can better understand the nature, source, and type of risks, and can more accurately measure risks. Investment objectives and risk tolerance capacity to construct an effective securities portfolio, and to update the investment portfolio in a timely manner in the event of market changes, so as to control the risk of fund assets within a predetermined range, etc., but the fund investment of different fund managers There are differences in management levels, management methods and management techniques, which have an impact on the level of fund returns.

Technical risk. When the computer, communication system, transaction network and other technical support systems or information network support are abnormal, it may cause the daily purchase or redemption of the fund to be completed within the normal time limit, the registration system to be disabled, and the accounting system to display the fund net value within the normal time limit The risk that the investment trading instructions of the fund cannot be transmitted immediately.

Huge redemption risk. This is a risk unique to open-ended funds. If huge redemptions occur continuously due to violent market fluctuations or other reasons, and cause fund managers to experience difficulties in cash payment, fund investors applying for huge redemption of fund shares may encounter risks such as delayed redemption or suspension of redemption. .

In order to strengthen the supervision of fund investment operations, improve the transparency of fund operations, and protect the legitimate rights and interests of fund unit holders, funds must fulfill strict information disclosure obligations. My country

China's " Securities Investment Fund Law " stipulates that fund assets should be used for the following investments: first, stocks and bonds listed and traded; second, other securities types specified by the securities regulatory authority of the State Council. Therefore, the investment scope of securities investment funds is financial instruments such as stocks and bonds. At present, China's funds mainly invest in domestic publicly listed and publicly issued stocks, non-publicly issued stocks, government bonds, corporate bonds and financial bonds, corporate bonds, money market instruments, asset-backed securities, warrants, etc.