Types of Funds - Current affairs dictionary

Funds are divided into bonds and equity depending on whether they buy bonds or buy stocks. Funds can be divided into growth type, stable growth type, and stable type depending on the stock addition ratio.


■ Bond-type fund / equity-type fund The

classification of a fund is divided into equity, hybrid, and bond types depending on how much money you invest in stocks. If you invest more than 60% in stocks and bonds, Respectively.

In other words, "bond fund" is a commodity that invests more than 60% of trust assets in bonds and bonds-related derivatives without including stocks (including stock-related derivatives) in the operation target.

'Equity-type funds' are commodities that invest more than 60% of trust assets in stocks and equity-linked derivatives (stock index futures and options), and equity-type funds have the risk of incurring principal, unlike bonds. On the other hand, if the stock market is highly profitable, it can generate high returns.

'Hybrid funds' are subdivided into stocks (up to 50%), bonds (less than 50%), and other types of bonds, depending on the percentage of shares to be incorporated.


■ Growth Type / Stable Growth Type / Stable Type The

equity type fund can be divided into growth type, stable growth type, and stable type depending on the ratio of stock additions. Since stocks are risky assets, the lower the cost of stocks, the higher the stability.

'Growth-type fund' refers to a fund that maintains a 70% or more shareholding ratio and pursues high profits. If the share price rises, it will make a big profit, but if the stock price falls, you can lose a substantial amount of the principal.

The 'stable growth type' is a product with a share uptake ratio of around 50%, which is smaller than the growth type. However, when the share price falls, it can prevent a sharp decline in the yield. In the long run, we aim to earn profit on real rates.

'Stable' refers to a product that has little or no loss of principal, such as a low-paid-in-stock or fund-saving fund with a 30% equity addition fee and a bond-type fund.

The stable stocks are less likely to lose principal because they invest less in stocks and the rest invest in safer government bonds or corporate bonds. Instead, they have a lower return compared to the stable growth type and the growth type.