- Diversification: The fund can provide a diversified portfolio and reduce specific risk attributed by single investment.
- Professional Management: Funds are managed by professional management team, so you can save a lot of time on market research and operation.
- Flexibility: Funds usually have high liquidity, making it easy to buy and sell. WeLab Bank's Featured Fund Service has no lock-up period, and settlement generally takes no more than four business days after the transaction date.
- Low Investment Threshold: Funds have a low minimum investment requirement, making them accessible to small investors.
- You can think of funds as an investment pool that brings together many investors, and they are managed by professional team. Typically, they invest in a number of related assets based on the fund's theme, thereby diversifying investment risk.
- By pooling money from many investors, funds can execute large-scale trades, reducing overall investment costs. This allows individual investors to access investment tools with higher barriers to entry and participate in markets and asset classes that might otherwise be difficult to reach.
- Furthermore, funds offer high transparency. As fund house must regularly disclose the holdings and performance of fund portfolios, allowing investors to clearly understand their investment status and determine if the fund aligns with their investment goals.
- Money Market Funds: Typically invest in short-term, highly liquid government bonds, commercial paper, and certificates of deposit, with lower risk. For example, feature funds under the theme of WeLab Money Plus.
- Bond Funds: Invest in fixed-income securities, with a risk level higher than money market funds but generally lower than mixed-asset funds, providing sound returns.
- Mixed Funds: Combine stock and bond investments to balance risk and return.
- Stock Funds: Invest in the stock market, with investments ranging from local to international, large-cap to small-cap stocks.
Investing in funds allows investors to invest in multiple assets at once, which naturally allows them to diversify the risk of investing in a single asset. If individual stocks within an equity fund underperform, there is a chance that other stocks that perform well will offset them, and the overall performance of the fund will remain stable. Therefore, compared with a single investment, funds can generally reduce the risk arising from asset concentration.(2) Invest in hard-to-reach markets and assets:
Funds can provide access to assets globally, giving investors the opportunity to capitalize on global investment opportunities. For example, if you are optimistic about the development of the Indian market, but it is generally difficult for investors to invest directly in the Indian market, you can invest through India-themed funds without having to manage complex international transactions on your own. A global approach for investing not only helps you diversify geographical risk, but also allows you to participate in growth in different markets around the world. In addition to the market, you can also invest in investment products with higher thresholds through funds, so that your investment tools can be more diversified.(3) Professional Management:
Funds are jointly managed by professional fund managers and research teams, who conduct market analysis, screen assets, and monitor their performance. For the average investor, not having to spend time tracking market trends and analyzing them is one of the major benefits.(4) High Liquidity:
Mutual Funds generally have high liquidity, allowing investors to easily buy and sell units, reducing liquidity and spread risk, and enabling investors to withdraw returns within a short timeframe. The settlement period is generally not more than four business days from the trading date. For example, WeLab Money Plus can accumulate return on the same-day and redeem cash on the same-day*.(5) Low Entry Threshold, Convenient for Small Investments:
Mutual Funds offer a relatively affordable minimum investment amount, allowing retail investors to enter the market with a small amount of principal. WeLab Bank's Featured Fund Service has a minimum investment amount as low as HKD 100 or USD 15, making it suitable for all types of investors.These advantages of fund investment make it one of the most popular investment tools. Many investors include funds in their portfolios to balance risk and enjoy the convenience of easy access to different markets. Of course, all investments involve risks, and you must choose the right fund based on your personal financial situation and risk tolerance.Disadvantages of Fund InvestingAlthough mutual funds have many advantages, they also come with certain limitations. Below are some common limitations, but this is not an exhaustive list. Investors must understand the risks and limitations of individual funds before making their choices.(1) Fees Impact Returns:
Buying and selling funds incurs various fees, such as subscription and redemption fees, which affect overall returns. To reduce transaction costs, you can invest through WeLab Bank's online fund platform, which offers unlimited $0 subscription/ switching fee, which can reduce investment costs by 85%#.#Details Please Refer to: Fund Investment Guide – Are Fund Fees Eating Into Your Returns?The examples provided are for illustrative purposes only. Before making any investment decision, assess your financial situation, investment goals and experience, risk tolerance, and understand the nature and risks of the relevant products.(2) Management Risk:
Although funds are managed by professional team, they are not guaranteed to be profitable. Poor decisions by the fund manager can lead to investor losses.(3)Other Risks:
Funds are also exposed to various risks, such as market, credit, and interest rate risks, which can cause the fund's net asset value to fluctuate.(4)Lack of Control:When investing in funds, investors cannot decide on the specific investment content or when to buy or sell specific assets, reducing autonomy. For example, if you strongly believe in a particular stock, you cannot increase the stock's position in the fund.If you want to reduce these risks, review the fund’s past performance or prospectus to see if it aligns with your investment strategy before investing. Log in to the WeLab Bank App to find information on each fund in the Feature fund service.Understand the characteristics and advantages and disadvantages of different investment products to better deploy your own investment portfolio. Download the WeLab Bank App now and easily get started with popular funds!Download Now | WeLab BankRemarks:
*Same-day subscription or redemption of funds is only applicable to WeLab Money Plus orders successfully submitted before the cut-off time of the WeLab Money Plus trading day, i.e. 9am HKT. Return accumulation means the income or return allocated to accumulation funds (non-dividend-paying funds) will not be distributed, but their net asset value per share will increase in respect of the income or return.Important Disclaimer:
This webpage is for information only and does not constitute any offer, solicitation, recommendation, comment or any guarantee to the purchase or sale of any investment products or services. The investment products or services mentioned in this webpage are not equivalent to, nor should it be treated as a substitute for, time deposit.Investment involves risk. The price of an investment fund unit may go up as well as down and the investment funds may become valueless. Part of your investment may not be able to liquidate immediately under certain market situation. Please refer to our Wealth Management Services Terms (including relevant risk disclosures) and relevant fund offering documents for more details of our services as well as the nature and risks of the relevant products.The investment decision is yours but you should not invest in these product(s) nor services unless the intermediary who sells them to you has explained to you that these products are suitable for you having regard to your financial situation, investment experience and investment objectives.Before making any investment decisions, you should consider your own financial situation, investment objectives and experiences, risk acceptance and ability to understand the nature and risks of the relevant product(s).If you have any inquiries on the nature and risks involved in this webpage, relevant product(s) and services, trading or investment funds, etc, you should seek advice from independent financial adviser.The information contained on this Website should not be construed as a distribution, an offer to sell, or a solicitation to buy any securities in any jurisdiction where such activities would be unlawful under the laws of such jurisdiction.If you are outside of Hong Kong, please inform yourself about and observe any relevant restrictions. By proceeding with a purchase, you are representing and warranting that you are either resident in Hong Kong or the applicable laws and regulations of your jurisdiction allow you to access the information in this Website or our App and make the purchase.This webpage is issued by Welab Bank Limited. The contents of this webpage have not been reviewed by the Securities and Futures Commission in Hong Kong.In case of any discrepancy between the English and the Chinese versions of this webpage, the English version shall prevail.