Foundation of Fund Entry: What is a fund company?

When many small white friends invest in banks, they often consider whether the fund can make money, how much money it can make and whether it is safe, but rarely think about whether the fund company can make money or how the fund company can make money. So what is a fund company and how does it make money? Let Bian Xiao tell you today.

1. What is a fund company?

The fund company we often talk about is actually called the securities investment fund management company, which is an enterprise legal person established in China with the approval of the China Securities Regulatory Commission and engaged in the securities investment fund management business. The board of directors of the company is the highest authority of the fund company, and the promoters of the fund company are institutions engaged in securities business, securities investment consulting, trust asset management or other financial asset management. People usually refer to funds mainly as securities investment funds.

Second, how do fund companies make money? For fund companies, scale is expected income, and expanding scale is the core interest of fund companies. So sometimes, although the fund is losing money, the fund company still makes money.

There is an interesting example about how a fund company makes money: the son asked his father who works in a fund company, and the son said: all the money belongs to others. How do you make money? Dad said: You take the meat out of the refrigerator. Son, do it. Dad added: You put the meat back in the refrigerator. Dad asked, what do you have? The son replied: You have oil on your hand!

This example is very interesting. Although there is no direct answer to how fund companies make money, it is easy to think of how fund companies make money. In fact, fund management fees are the main source of income for fund companies. The fund management fee is the management remuneration paid to the fund manager, and its amount is generally extracted from the fund assets according to a certain proportion of the net asset value of the fund. Generally speaking, the proportion of fund management fees charged is higher than other expenses.

Editor's note: To sum up, what is a fund company? Simply put, it is a legally qualified fund management enterprise legal person, and fund companies mainly rely on scale and fund management fees to make money. Do you want to know more about the basics of fund introduction after reading it? Please move to the small financial column group.