Name
Open-end fund investment
Introduction
Fund is a popular trust investment tool and is initiated by fund management company or other founders. By issuing beneficiary certificates to investors, they collect the scattered funds from the public and entrust specialists with professional knowledge and investment experience to manage and operate the funds. The reputable financial institutions serve as the trustee or custodian of the raised funds. Fund operation consists of three major elements, namely, fund investor (also called beneficiary); fund manager, i.e., fund management company; fund custodian or trustee.
Subscription: investors purchase the funds by paying the unit face value of the funds and a small amount of fees during the fund raising period.
Purchase: after the fund is established, investors purchase the fund by paying the latest unit net asset value of the fund and a small amount of fees.
Redemption: investors sell their already held open-end fund units to the fund manager and redeem the capitals.
Main returns:
The bid-ask spread of funds fluctuates with the securities market, and the net value of fund units will change constantly, accordingly, the prices of fund purchase and redemption will rise and decline constantly. If investors can seize market opportunities to conduct open-end fund trading at a favorable time, they can benefit from the spread by selling at high price and buying at low price.
Fund dividend shall be adopted in two forms:
-- Cash dividend: cash distribution toward investors.
-- Dividend reinvestment: investors' dividends are reinvested in funds, and converted into corresponding amount of fund units.
Main charges:
Subscription charge refers to the fee investors need to pay to buy fund units. For specific subscription charge rate, please refer to relevant fund sales documents.
Purchase charge refers to the fee paid by investors to sell fund units. For specific purchase charge rate, please refer to relevant fund sales documents.
Reinvestment charge refers to the purchase fee paid by investors to reinvest the distribution returns obtained from the open-end fund in funds.
In addition, there may be other fees during the trading process of open-end fund, and for specific information, please refer to the sales documents of funds or notes of sales outlets.
Calculation of open-end fund subscription, purchase and redemption price
The purchase and redemption price of open-end fund is worked out based on the net asset value (NAV) of unit fund. Unit fund net assets value, namely, the net value of the fund assets represented by each fund unit, is calculated in accordance with the following formula:
Unit fund net asset value = (total assets - total liabilities)/total amount of fund units
Our Advantages
Stable returns, large-scale investment, professional management, diversified investment risks, and strong liquidity; strong steadiness by investing in sustainably developing companies; combination of various investment proportions, and reasonable fund operations; close monitoring and supervision, transparent operations, and secure capitals; specialists' advice for wealth management. If customers conduct the agent sales of open-end fund at the outlets above Bank of China office (including office), they can directly subscribe, purchase and redeem the open-end fund, which will provide them with more convenient and prompt services during the process of fund investment.
Target Customers
1. Individual investors: natural persons who are allowed to invest in securities investment funds by relevant laws and regulations of the People's Republic of China.
2. Institutional investors: enterprise legal person, public institutional legal person, social groups or other organizations that are legally registered within the territory of China, or established and operating effectively with the approval of authorized government departments and are allowed to invest in funds by law.
Process
The customer only needs to hold his/her own valid identity document and Great Wall Debit Card to open fund trading account. After that, the customer can conduct transactions related to open-end fund with the Great Wall Debit Card and the fund trading account.
I. Opening Fund Trading Account
II. Purchasing the Fund
III. Fund redemption
In addition to buying fund units, investors can also apply for funds exchange, non-transaction transfer, dividend reinvestment, fund freeze/unfreeze, and pledge/pledge cancellation and so on.
Notice: T date refers to the customer's handling date of the fund business.
Required Documents
The customer's own valid identity document.
Risk Disclosure
Liquidity risk
On the extreme occasion of huge-amount fund redemption or suspended redemption, fund investors are not able to redeem the total amount of the net asset value of unit funds on the very day. If investors' choice is the delay in redemption, they shall bear the risk of net asset value reduction of unit funds in the following call days.
Risk of unknown price of purchase and redemption
When conducting funds trading on the very day, investors have to refer to the net asset value of unit funds of the previous fund trading day, while the fund net value and trading price are uncertain on the very day. Therefore, investors shall bear some unknown risks.
Fund investment risk
Investment risk caused by price fluctuation in the securities market.
Institution operation risk
Mainly including systematic operational risk, management risk, and business risk and so on.
Force majeure risk
Risks happened to fund investors caused by force majeure such as war, natural disasters and so on.
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