Office workers' financial salvation: Complete guide to fund investing, understand how to allocate your investment portfolio in 3 minutes

Have you ever faced this problem?

You have some spare money and want to grow it, but you simply don’t have the time to research complex investment products like stocks and futures. If you’re a beginner investor in this situation, funds are definitely your top choice for managing your finances. Today, we’ll take a deep dive into fund tutorials to clarify how they help you make money.

What is a fund? Why is it suitable for working professionals?

In simple terms, a fund pools your money together with other investors’ funds and is managed by professional fund managers. Banks or brokerage firms act as intermediaries, handing over investors’ capital to fund managers, who then oversee it, with a custodian bank supervising and safeguarding the assets.

This is a collective investment approach that shares profits and risks. You don’t need to research which stocks will rise or monitor the market all day; a professional team handles these tasks for you. For working professionals with limited investment experience and time, the most important point in fund education is—its risk is much lower than directly trading stocks.

Moreover, the entry barrier for funds is low; you can start investing with as little as 3000 yuan, which is quite friendly for small investors.

How are funds classified? Choosing the right type for you

Based on different investment targets, funds can be divided into five main categories, each with different risk and return profiles.

Money Market Funds — The Safest Choice

Primarily invest in government-issued bonds, commercial paper, certificates of deposit, and other short-term fixed-income products. These funds are the safest, with the best liquidity, but their long-term returns are relatively low. Suitable for conservative investors who prioritize capital safety and liquidity.

Bond Funds — Steady Growth Path

Invest in fixed-income instruments like government bonds, treasury bonds, corporate bonds, etc., appreciating through interest income. They have lower risk than stock funds but offer more stable returns. If investing in government bond funds, the risk is even lower, and liquidity is better. The downside is that it may take a longer investment period to see significant returns.

Stock Funds — High Risk, High Return

These funds directly invest in common stocks and preferred stocks. Due to the high volatility of the stock market, stock funds have the greatest potential for returns but also the highest risk. You might earn substantial profits or face losses in the short term. Suitable for investors with a certain risk tolerance and willingness to hold long-term.

Index Funds — Passive Investment Tracking the Market

Fund managers buy all or some of the components of a specific index, aiming to replicate its performance. Common ETF funds belong to this category. Index funds have good liquidity, relatively low management costs, but their returns fluctuate with the index.

Hybrid Funds — Balanced Investment

Invest in a mix of stocks, bonds, and other assets, seeking a balance between risk and return. Suitable for conservative investors with natural diversification. Their risk level falls between bond funds and stock funds.

Core of fund education: How does money flow?

Once you decide to invest in a fund, what journey does your money go through?

Participants include three parties: First, you (the fund unit holder), then the fund manager (the fund management company), and finally, the custodian bank (the fund custodian).

The flow of funds is as follows: Your money is first pooled together. The fund manager analyzes and decides which financial products to invest in (possibly stocks, bonds, money market instruments, etc.), and then the custodian bank actually invests this capital into the market. This structure ensures your funds are safe because the custodian bank’s role is to supervise and protect the fund’s assets.

Hidden costs of fund investment: a list of fees you need to know

Many beginners only look at returns but overlook the costs involved in investing in funds. Here are the most common fees:

Subscription Fee — Charged when purchasing funds
Typically 1.5% for bond funds, 3% for stock funds. Some sales channels offer discounts, so comparison is important.

Redemption Fee — Charged when selling
Most funds in Taiwan do not charge redemption fees, but funds purchased through banks may sometimes levy a “trust management fee” of about 0.2% per year, deducted from the net asset value at redemption.

Management Fee — Annual fee charged by the fund company
Usually between 1% and 2.5% annually, depending on the fund type. ETF funds tend to have lower management fees.

Custodian Fee — Bank’s safekeeping fee
About 0.2% per year, charged by banks or third-party institutions that safeguard the fund’s assets.

How to allocate your investment portfolio? Don’t put all your eggs in one basket

To make money from funds while reducing risk, the key is to build a suitable investment portfolio. This requires understanding your financial situation and risk tolerance.

Based on different risk preferences, allocations can be as follows:

If you’re a risk-loving investor — willing to tolerate volatility for high returns
Allocation: 50% stock funds, 25% bond funds, 15% money market funds, 10% other products

If you’re a risk-neutral investor — seeking steady growth
Allocation: 35% stock funds, 40% bond funds, 20% money market funds, 5% other products

If you’re risk-averse — prioritizing capital safety
Allocation: 20% stock funds, 20% bond funds, 60% money market funds

The core principle is simple: don’t invest all your money in a single fund. Through diversified allocation, you can offset losses in some funds with gains in others, achieving a “dynamic balance of risk and return.”

Practical fund tutorial: How to start investing?

Ready to buy funds? The process is quite simple:

Step 1: Register — Fill out personal information and submit an investment application

Step 2: Deposit funds — Choose a suitable deposit method and transfer money into your investment account

Step 3: Place order — Select the fund product, confirm the amount, and click to purchase

The entire process can be completed online, no need to visit a bank. Most brokerages or fund platforms provide clear instructions for purchasing.

Why is fund investment worth choosing? An overview of advantages

Asset Diversification — Funds invest in stocks, bonds, commodities, and other assets, offering broader investment opportunities

Risk Diversification — Reduces the chance of total loss from a single investment failure; diversification is the best way to prevent losses

Professional Management — Managed by experienced fund managers with deep market knowledge, making decisions more scientific and returns more targeted

High Liquidity — Can buy and sell at any time, allowing quick cash realization when needed, without worries about being locked in

Low Entry Barrier — Starting with just 3000 yuan, suitable for small investors

Summary: Key points of fund education

The core of fund education is that it is a financial tool tailored for busy working professionals. You don’t need to become an investment expert or monitor the market daily; just choose suitable fund types based on your risk tolerance, build a balanced portfolio, and leave the management to professionals to grow your wealth.

Remember to pay attention to costs when investing in funds, regularly review your portfolio allocation, and adjust proportions according to your life stage. Even if you’re a beginner, you can steadily achieve financial growth through the knowledge learned in fund tutorials.