Want to grow your wealth through investing but feel unsure where to start due to stock market volatility? Fund investing has a relatively low entry barrier and provides diversification, making it an ideal starting point for many beginners. This article provides the most comprehensive fund buying tutorial, guiding you step by step from account opening and fund subscription procedures to the final fund redemption process, helping you easily take the first step in financial planning and master the core techniques of how to buy funds. Whether you are a beginner investor or a working professional seeking asset growth, this guide offers clear direction.
Before learning how to buy funds, you must first understand what a fund is and why it is an investment tool worth considering. Simply put, a fund pools capital from many investors and is managed by professional fund managers, investing in a basket of assets such as stocks, bonds, or other financial instruments with the goal of generating returns for investors.
When buying and selling stocks directly, you must research which companies are worth investing in and determine the timing of buying and selling yourself, which can be difficult for beginners. The biggest difference with funds is that professionals manage them for you. Fund managers use their expertise and research teams to build a diversified investment portfolio on your behalf.
The following are the main differences between the two:
| Comparison Items | Investing in Funds |
Buying Stocks Directly |
| Decision Maker | Professional Fund Manager Team | The Investor Themselves |
| Risk Diversification | High (capital invested in a basket of assets) | Low (risk concentrated in a single stock) |
| Required Knowledge | Relatively low, need to understand how to select funds | Relatively high, need to conduct in depth research on individual stocks |
| Entry Threshold | Relatively low, can be as low as several hundred dollars | Relatively high, one lot of stocks often costs several thousand to tens of thousands of dollars |
Although funds are considered beginner-friendly investments, every investment has two sides. Understanding both the advantages and the risks is the foundation for making informed decisions.
Benefits of Investing in Funds:
Potential Risks of Investing in Funds:
There are many types of funds available in the market, but most can generally be categorized into the following types. Understanding their characteristics can help you choose according to your own risk tolerance.
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Once you decide to invest in funds, the next step is choosing where to open an investment account. Currently, the two most common channels are traditional banks and emerging online fund platforms. Each has its own advantages and disadvantages in terms of fees and convenience.
For many investors, banks are the most familiar and trusted channel. While handling routine banking matters, you can also consult relationship managers about fund investments.
In recent years, online fund platforms have grown rapidly, attracting many investors, especially younger ones, with their lower fees and greater convenience.
Channel Comparison:
| Item |
Bank |
Online Fund Platform |
| Subscription Fee | Usually 1–3% | Many offer 0% |
| Fund Selection | Limited | Very broad |
| Convenience | Moderate, or may require visiting a branch | High, with 24/7 online operations |
| Customer Service | Dedicated relationship manager available | Primarily online customer service and email support |
| Suitable For | Investors who prefer traditional channels and require personalized service | Investors seeking lower costs and comfortable with independent research |
Regardless of which channel you choose, the account opening process is largely similar and generally includes the following steps:
Once your account is successfully opened, congratulations! The next step is the most exciting part: putting your knowledge into practice. This section explains each step of the fund subscription process in detail, allowing you to confidently complete your first investment.
With thousands of options available, how should beginners start? Consider the following points:
Assuming you have already selected a fund, the typical subscription process is as follows:
This is a common question for beginners. There is no absolute right or wrong choice. The key is whether the method suits your personal situation.
Fees are a key factor that directly affects your final investment returns, so it is important to understand them clearly. Common fees include:
The ultimate goal of investing is to realize profits. Understanding the redemption process allows you to convert your investment into cash smoothly when needed.
Selling a fund requires even more judgment than buying one. Apart from market sentiment, decisions should be based on rational factors:
The redemption process is similar to the subscription process, but in the opposite direction:
The key factor is the time required for settlement. Fund redemption is not instant. Generally, it takes several working days from submitting the redemption request to receiving the funds (usually between T+3 and T+7, depending on the fund type and region). Therefore, if you anticipate needing cash urgently, advance planning is essential.
Before clicking the redemption button, always check whether there are redemption fees or deferred charges. Some funds encourage long-term investment by imposing higher redemption fees on investors who sell within a certain holding period (such as one to three years). These conditions are clearly stated in the fund’s offering documents. Understanding them in advance can help you avoid unnecessary expenses.
A: It depends on the platform. Traditional banks may require a higher minimum investment, typically starting from HKD 10,000 per transaction. However, through online fund platforms, the entry threshold has been significantly reduced. Regular investment plans usually require only HKD 1,000 per month, or even less, making small-scale investing widely accessible.
A: Generally, money market funds are the fastest, with settlement possibly within T+1 or T+2. Equity or bond funds take longer, and the proceeds are typically credited to your designated bank account within three to seven working days after submitting the redemption request. Funds investing in emerging markets or specialized sectors may take even longer.
A: Evaluating fund performance should not rely solely on short-term returns. You should review the fund’s long-term performance (over at least three to five years), compare it with similar funds and benchmark indices, and examine risk indicators such as the Sharpe Ratio to assess whether the return generated per unit of risk is attractive.
A: Yes. Management fees are calculated as a percentage of the fund’s total net asset value and are deducted daily. Whether the fund generates profits or losses in a given year, the fund company still charges this fee because it provides asset management services. This is why the expense ratio is an important factor when choosing a fund, as it directly affects long-term compound returns.
In summary, buying funds is an investment approach suitable for beginners that helps diversify risk. From understanding basic fund concepts and comparing account opening channels to mastering the actual subscription and redemption procedures, this comprehensive fund buying guide aims to clear the confusion on your investment journey. Investing is a long-term process. The most important thing is not chasing quick profits but building a strategy that suits you and consistently following it. Take action now, choose the investment platform that fits your needs, and begin your journey toward growing your wealth!
