Just like choosing a good name for a child, fund companies also put a lot of thought into naming their funds. Dongfanghong Industrial Upgrade Mix A, E Fund Consumer Industry B, CI Morgan Global Rotating All-Weather Fund Portfolio?. What is the meaning behind such a complicated name?
The name is our first clue to the fund style. Today I asked the financial planner to start with the "name of the fund." After listening, you may be able to judge the investment direction, risk level and investment strategy of a fund from the fund's name, so as to have a preliminary understanding of the fund.
Edited by Miao Xinxin, Noah Wealth Brand Market Center
Source: Noah Wealth (ID: NoahGroup)
Q: How was the name of the fund decided?
According to the latest statistics from a certain fund website, there are currently 125 fund companies on the market, issuing 6,561 funds. With so many funds, it is indeed not easy to distinguish one from another.
Generally speaking, the name of a fund generally consists of these parts:
Company name + investment direction or fund characteristics + fund type
For example: < /p>
"E Fund Consumer Industry Stocks" is composed of the company name "E Fund" + the investment direction "Consumer Industry" + the fund type "Stocks".
Below we will explain these components one by one:
PART 1: Company name
For example, "Bank of Communications XXX" is "Bank of Communications XXX" Silver Schroders Fund Management Co., Ltd.” fund.
PART 2: Fund Type
Fund types can be mainly divided into: stock funds (more than 80% invested in stocks), bond funds (more than 80% invested in bonds), currency funds (only Invest in the money market), mixed funds (which do not meet the first three regulations), etc.
The type of fund often reflects the risk-return characteristics of the fund. According to the order of risk and return, generally speaking: stock funds > hybrid funds > bond funds > currency funds.
In addition, ETF and LOF are also common "little tails" in fund names.
Funds with "LOF" in their names are listed open-end funds. Funds with "ETF" in their name are exchange-traded funds. The main difference between them is the transaction mechanism and transaction amount.
PART 3: Fund characteristics
1. Investment direction
Theme funds
For example, those with "Internet" in their names, The main investment direction will be in products related to the Internet; if there is "environmental protection" in the name, the investment direction will be biased towards products with environmental protection themes; similarly, there are "consumption, One Belt and One Road, state-owned enterprise reform?"< /p>
Index funds
For example, a fund with the words "CSI 100, SSE 50, CSI 300?" in its name means that this fund tracks a specific index. The goal is to invest in the constituent stocks of the index, or to buy all the stocks that make up the index in proportion.
Invest in funds in different markets
Funds with "Shanghai, Hong Kong and Shenzhen" in their names can participate in Southbound Trading; funds with "QDII" in their names can invest overseas securities market.
2. Investment style
In fact, fund companies will try their best to reflect the investment strategy of the fund when naming the fund. Most fund names can indeed fully reflect the characteristics of the product.
Commonly used keywords for funds include growth, value, growth, selection, selection, dividend, stability, theme and allocation.
It’s called “preferred, selected, and flexible configuration”. These are easy to understand and have the literal meaning. Those called "value" generally invest in large-cap blue chip stocks and long-term value growth products. It's called "quantitative" and generally uses big data to build investment models to guide investment strategies.
PART 4: ABC after the name
Many fund names will have a letter at the end, which means different meanings depending on the fund type:
Graded Fund
The difference between Graded Fund A and Graded Fund B is as follows:
Everyone gathers money to A, and then A lends part of the money to B to speculate in stocks, and B A makes money by speculating in stocks, and A earns interest by lending money to B. A has lower risk and lower return; B has higher risk and higher return.
Monetary Funds
Class A currency funds generally have no subscription threshold and are aimed at ordinary investors; Class B currency funds generally have a subscription threshold in terms of amount, mainly in terms of amount. It is aimed at users or institutional investors with large amounts of funds.
Stock/Bond/Hybrid Fund
The difference between the ABC of these three types of funds is mainly reflected in the subscription fee: Type A is usually a "front-end charge", and the subscription fee is charged when subscribing. Class B is usually a "back-end charge", that is, when the fund is redeemed, a subscription fee and a redemption fee are charged together; Class C is usually "subscription fee-free" and a daily sales service fee is accrued instead.
Q: Why is the fund’s name so long?
The above only introduces the basic knowledge of fund naming. In fact, the fund names we encounter may exceed your imagination.
Therefore, the more professional and easy-to-recognize answer is: handsomely throw out the 6-digit fund code, and there it is, not bad.
So how is the fund’s code formed? Are there certain rules to follow? We distinguish between unlisted and listed funds. The code rules are as follows:
Unlisted funds
The fund code is a 6-digit number. At the beginning of fund development, there were few fund companies and the number of funds was small. There are few, so Zhongdeng TA system (Zhongdeng is China Securities Clearing and Registration Co., Ltd.) assigns a code prefix to each company.
For example, the common 550XXX and 161 XXX follow this rule.
Why do many of the codes of new funds begin with “000”? This is because the maximum capacity of TA codes is 100, and the number of fund management companies has exceeded 70, so TA codes face the problem of insufficient resources.
So from December 26, 2012, the new standard "Securities Investment Fund Coding Specification" was released, which stipulates that for newly established funds, the coding will still use 6-digit coding, but it will be decoupled from the TA coding. The fund coding No longer has meaning.
So we can see that the codes of unlisted funds established after the promulgation of the "Norms" all start with 00.
Listed Funds
Open-end securities investment funds listed and traded on exchanges (such as exchange-traded open-end index funds (ETF), listed open-end funds (LOF), closed-end funds etc.), the coding rules are regulated by the stock exchange, as follows:
Shenzhen Stock Exchange Funds
The first code of funds listed on the Shenzhen Stock Exchange is 1
The second digit code of open-end funds is 5 (ETF funds, hierarchical funds) or 6 (LOF funds, other funds); the third and fourth digit codes are the fund management company codes uniformly stipulated by the China Securities Regulatory Commission Information Center, and the last two digits of the code are It corresponds to the sequence number of all open-end funds issued by the fund management company
The second and third codes of the securities code of closed-end securities investment funds are 84, and the last three codes are compiled in sequence, such as Xiaobaojia’s The closed code of Baoying Hongyang is 184728
Shanghai Stock Exchange Fund
The first code of the fund listed on the Shanghai Stock Exchange is 5
Traded open-end index securities investment fund The second and third digit code of (ETF) is 10, the second and third digit code of open-end fund subscription and redemption (such as exchange-traded funds) is 19
The second and third digit code of closed-end fund is 00
Q: Can the name of a fund truly reflect the fund’s investment strategy?
Now that we know the original intention of the fund company in naming it, it is to try every means to reflect the investment strategy of the fund. So here comes the question: Can the fund really be “worthy of its name”? If you say "value" is good, you will never invest in "growth", if you say "health care" is good, you will never invest in "military industry"?
It should be noted that there are many funds on the market that do not live up to their name.
Even theme funds will adjust their investment strategies according to market conditions, and their stock investment portion generally will not hold 100% of the stocks in a certain sector. When choosing a fund, in addition to reading the name clearly, you should also refer to the fund's regular reports to confirm whether the fund's investment portfolio and investment strategy are in line with your investment preferences.
Finally, to summarize, choosing funds by name can be a good way for us to initially screen funds. However, not all funds can be "worthy of their name". It is recommended to conduct further verification before making a decision on whether to purchase the fund.