In the field of fund management, terms such as public funds, member funds, open-ended funds, closed-ended funds, ETFs, equity funds, infrastructure funds, or real estate funds are often used interchangeably and can easily cause confusion. In particular, “open-ended funds,” “member funds,” and “equity funds” are not thr
An investment fund is a form of pooling capital from multiple investors to invest in assets according to a specific strategy.
Instead of each investor individually selecting and managing each investment, capital is pooled into the fund and professionally managed by a fund management company.
It can be visualized as:
For example, a fund with 100 billion VND can use this capital to invest in stocks, bonds, infrastructure projects, real estate, or businesses, depending on the fund's strategy.
A fund management company is a professional entity that manages the assets and investment portfolio of a fund in accordance with the law, the fund's charter, and its investment strategy.
Simply put:
Investors contribute capital → Fund receives capital → Fund management company manages and invests capital → Portfolio generates profit or incurs risk → Results belong to investors according to their respective proportions/rights.
According to the Securities Law, it is essential to first understand two basic types:
This is the most important diagram for understanding the system.
A public fund is a fund that offers fund certificates to the public in accordance with securities law.
In simpler terms:
This is a fund designed to raise capital from a broader range of investors by offering fund certificates to the public.
Public funds are divided into:
A fund raises capital from multiple investors and uses that capital to invest in stocks.
Investors do not need to buy individual stocks but instead buy fund certificates.
The fund management company will manage the portfolio on behalf of the fund.
A member fund is a type of fund for a group of investors who meet the legal conditions, where fund members are professional securities investors as defined by law.
According to the Securities Law, a member fund has:
Member funds are often suitable for specialized investment strategies, such as:
However, it is important to note:
“Member fund” is a legal form, not the name of an investment strategy.
Open-ended and closed-ended funds are two forms of public funds.
The key difference lies in the mechanism for repurchasing fund certificates and the fund's capital flow.
| Criterion | Open-ended Fund | Closed-ended Fund |
|---|---|---|
| Repurchase of fund certificates | Yes, according to the fund's mechanism | No repurchase at investor's request |
| Capital size | Can change with issuance/repurchase | Relatively stable during the operating period |
| Liquidity | Usually through transactions with the fund | Can be traded on the market if certificates are listed |
| Strategy | Can invest in stocks, bonds... | Can invest in various asset types |
| ETF | Possible | No |
Important:
Open-ended/closed-ended funds do not specify what the fund invests in.
It refers to how the fund operates.
An ETF (Exchange Traded Fund) is a type of open-ended fund with a specific mechanism, and its fund certificates are traded on the stock market.
The simplest way to understand:
An ETF is like a "basket" of many stocks/assets. An investor buying an ETF certificate indirectly invests in that entire basket of assets.
Suppose an ETF tracks an index composed of many stocks:
| Stock | Assumed Weight |
|---|---|
| A | 25% |
| B | 20% |
| C | 15% |
| D | 10% |
| Other Stocks | 30% |
Instead of investors having to buy individual stocks A, B, C, D..., they can buy ETF certificates.
Thus:
One ETF certificate = a portion of the economic benefits in the entire fund's portfolio.
Portfolio = Investment Portfolio.
For example, an Equity Investment Fund has:
All these assets constitute the Fund's Investment Portfolio.
Public Fund / Member Fund → what type of fund is it organized as?
Open-ended Fund / Closed-ended Fund → how does the public fund operate?
ETF → a type of open-ended fund with a specific mechanism and traded on the market.
Portfolio → what assets does the fund hold?
Portfolio Management → how is that portfolio managed?
In the field of fund management, terms such as public funds, member funds, open-ended funds, closed-ended funds, ETFs, equity funds, infrastructure funds, or real estate funds are often used interchangeably and can easily cause confusion. In particular, “open-ended funds,” “member funds,” and “equity funds” are not thr
In the field of fund management, terms such as public funds, member funds, open-ended funds, closed-ended funds, ETFs, equity funds, infrastructure funds, or real estate funds are often used interchangeably and can easily cause confusion. In particular, “open-ended funds,” “member funds,” and “equity funds” are not thr
In the field of fund management, terms such as public funds, member funds, open-ended funds, closed-ended funds, ETFs, equity funds, infrastructure funds, or real estate funds are often used interchangeably and can easily cause confusion. In particular, “open-ended funds,” “member funds,” and “equity funds” are not thr
In the field of fund management, terms such as public funds, member funds, open-ended funds, closed-ended funds, ETFs, equity funds, infrastructure funds, or real estate funds are often used interchangeably and can easily cause confusion. In particular, “open-ended funds,” “member funds,” and “equity funds” are not thr
In the field of fund management, terms such as public funds, member funds, open-ended funds, closed-ended funds, ETFs, equity funds, infrastructure funds, or real estate funds are often used interchangeably and can easily cause confusion. In particular, “open-ended funds,” “member funds,” and “equity funds” are not thr
In the field of fund management, terms such as public funds, member funds, open-ended funds, closed-ended funds, ETFs, equity funds, infrastructure funds, or real estate funds are often used interchangeably and can easily cause confusion. In particular, “open-ended funds,” “member funds,” and “equity funds” are not thr
In the field of fund management, terms such as public funds, member funds, open-ended funds, closed-ended funds, ETFs, equity funds, infrastructure funds, or real estate funds are often used interchangeably and can easily cause confusion. In particular, “open-ended funds,” “member funds,” and “equity funds” are not thr
In the field of fund management, terms such as public funds, member funds, open-ended funds, closed-ended funds, ETFs, equity funds, infrastructure funds, or real estate funds are often used interchangeably and can easily cause confusion. In particular, “open-ended funds,” “member funds,” and “equity funds” are not thr
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