What is Open-End Fund

WHAT IS OPEN-ENDED FUND?

Open-ended fund is the fund in which capital is contributed by investors with the same investment objective and is managed by a reputable fund management company. Experienced specialists of the fund management company will invest money in securities (stocks or bonds) that are screened and selected based predetermined criteria with an ultimate aim is to gain profit for investors in medium to long terms.

The fund’s operation term is indenifite.

Investors can subscribe and redeem open-ended fund certificates without limitation. After Initial Public Offering (IPO), investors can sell or buy fund certificate periodically based on Net Asset Value per Fund Certificate (NAV/Unit) directly with the fund management company.

This type of fund allows investment diversification in order to minimize financial risk.

WHO SHOULD INVEST IN OPEN-ENDED FUND?

Open-ended fund is suitable for investors who

• Want to have investment diversification in a portfolio with small budget and low cost.
• Want to have long term investment but do not have enough capacity to analyse securities daily.
• Look for disciplined and convenient investment product that is managed by experienced specialists.

CLOSE-ENDED VS OPEN-ENDED FUND

OUSTANDING ADVANTAGES OF OPEN-ENDED FUND

• Low cost: With a small capital, investors can indirectly invest in many different investment instruments from stock, bond to real estatewhereas, it’s hard to invest directly this way if you don’t have a lot of money.
• Professionalism: Choosing open-ended fund, investors will have access to professional fund management companies that have experienced specialists and other resources to analyse and follow up investment portfolios. Investors therefore can save time as there’s no need to keep regular track of market movement.
• Flexibility: Open-ended fund is managed by a team of specialists with in-depth knowledge. They can quickly rebalance investment portfolio to adapt to complicated fluctuations of the market. This makes open-ended fund really suitable for investors who do not have much time to follow up and respond to market movement and foreign investors who do not have sufficient understanding of Vietnamese stock market.
• Investment diversification: An open-ended fund invests in a basket of various securities. Investment in stocks of different industries helps minimize risk. An investor with small budget can still implement an efficient diversification strategy. Moreover, fund is allocated flexibly to stocks and fixed-income assets as a solution to get profit growth and generate stable income to owners of fund certificates.
• Earnings development: Throughout the fund’s life, at the fund’s ultimate goal is to protectinvestors’ benefits and increading asset.  Investors can enjoy capital growth along with the stable development of top competitive advantage firms in the market.
• Risk control: A strict risk control process is set up before, during and after investment process, which helps the fund minimize risks.
• High liquidity: If needed, investors can liquidate their investment into cash easily by redeeming part or the whole fund certificates.
• Time saving: Investors can free themselves from a huge volume of work as there’s no need to analyse and look around for investment opportunities in a more and more complicated financial market. As a result, they can spend more time for their own business and family.
• Transparency: All information related to the fund activities are updated to investors regularly, fully and clearly under strict control of the supervisory bank.