When buying stocks, investors will consider the size of the stock circulation plate. At the same time, when selecting funds, investors will also consider the size of fund issuance. So, is it better for investors to choose large-scale funds or small-scale funds? Next, I will analyze it with you.
Advantages of small fund size
The fund scale is small, which is convenient for fund managers to adjust their positions, and its operation is more flexible.
Disadvantages of small fund scale
In the operation of funds, small-scale funds, whose fixed information disclosure fees, audit fees, lawyer fees and other fees are apportioned to the fund, which will increase the cost of its unit share, and investors need to pay more handling fees when purchasing; the smaller funds have the risk of redemption and are easy to be liquidated.
Advantages of large fund scale
In the operation of the fund, its fixed information disclosure fee, audit fee, lawyer's fee and other expenses are apportioned to the fund. Because of its large scale, when investors purchase, the transaction fee is relatively low, and the risk of liquidation is lower.
Disadvantages of large scale fund
Because of the large scale of the fund, its operation is more difficult. Because of its large scale, it needs to allocate more stocks, which may make it difficult for fund managers to focus on tracking each stock; it is not conducive to fund managers to adjust positions and affect the flexibility of operation. At the same time, large funds are generally allocated in some large cap stocks with good liquidity, and their excess expected return is relatively low.
in summary,When choosing funds, investors should try to choose funds with moderate scale, and at the same time, they should consider the historical performance of funds and the management ability of fund managers.
Investment is risky and we should be cautious when entering the market