With relatively stable returns and low subscription thresholds, bond funds have become the choice of more and more investors with low and medium risk appetite.
Among the many bond funds, there is a special kind of existence - their names often have the words "regular opening", "holding period", "rolling holding" and so on. When bond funds encounter a "lock-in period", will it become more fragrant? Today we will talk about it briefly~
What is a bond base with a "lock-up period"?
There are three main types of bond bases with "lock-up periods", namely regular open-ended, holding periods, and rolling holding periods, and the differences between these three types of products are mainly reflected in the subscription and redemption rules.
Open on a regular basis
It is open every once in a while, and can only be subscribed and redeemed during the open period, and enters the next closed period after the end of the open period, and so on.
Holding period
It can be redeemed at any time after being held to the agreed period, and its characteristic is that "there is no restriction on subscription, and there is a limit on redemption".
Rolling holding period
Between the regular opening period and the holding period, you can subscribe at any time, but you can only apply for redemption on the maturity date of each operation period of the fund shares, if you do not apply for redemption on the maturity date, you will automatically enter the next operation period.
Will it be more fragrant for the bond base to encounter a "lock-up period"?
Compared with the ordinary open-ended bond base, the bond base with a "lock-up period" has been more or less "shackled" in terms of liquidity, so will it be more fragrant in terms of holding experience?
For investors, because the bond base with a "lock-in period" sets a certain holding period requirement, on the one hand, it can passively let us control our hands when the short-term market fluctuates, and avoid reducing the short-term chasing of the rise and fall behavior, on the other hand, most of them will not charge additional redemption fees when redeeming.
For fund managers, the "lock-in period" of bond-based bands can reduce the impact of short-term redemptions, especially large-scale redemptions, on fund operations to a certain extent, and ensure the relative stability of fund shares, thereby helping fund managers to make layouts from a longer-term dimension, improve the efficiency of portfolio capital use, and pursue higher investment returns.
In terms of income performance, in the short term, the bond base with a "lock-in period" cannot be directly equated with "higher yield", but in the long run, the yield performance of the bond base with a "lock-in period" is relatively better.
At present, the mandatory holding period of the bond base with a "lock-in period" in the market has a large time span, ranging from a few days to several years, so you may wish to find the one that suits you according to your own liquidity needs~
Risk Warning: Funds are risky, and investment should be cautious. Wells Fargo Fund does not guarantee that the fund investment advisory portfolio strategy will be profitable and the minimum return, nor does it make a commitment to capital protection, and investors may not be able to obtain returns or even lose their principal when participating in the fund investment advisory portfolio strategy. The fund investment advisory business is still in the pilot stage, and there is a risk that the fund investment advisory institution will not be able to continue to provide services due to the cancellation of the pilot qualification.