Monetary fund and its characteristics

Monetary fund and its characteristics:

Monetary fund is essentially an open-end fund, and its main investment targets include government bonds, central bank bills, commercial bills, bank time deposit certificates, short-term government bonds, corporate bonds and interbank deposits.

Compared with other fund products, money funds have the following typical characteristics:

Good safety and low risk.

From the perspective of investment security, the security of money funds is obviously superior to other fund products. Money funds rarely lose money, but the rate of return is high and low.

Good liquidity

Most fund products take a long time when investors need to redeem the fund, usually at least two trading days. Monetary funds can be withdrawn at any time, which greatly improves the liquidity of funds.

Low investment cost

At present, most money funds do not charge redemption fees, but only a small amount of management fees and service fees. This part of the expenses will be deducted from the net value of the fund on a daily basis.

How to choose a monetary fund;

In order to ensure the maximum return on investment, investors should follow the following basic principles when choosing monetary funds:

Principle of income maximization

Relatively speaking, the income of money funds is relatively low, and investors can choose the fund with the highest income as an alternative fund variety through the fund sales website or fund trading system.

Operational stability principle

Choose those varieties that have been operating for a long time and have been relatively stable in income.

Principle of moderate scale

Monetary funds are run by professional fund managers. When a fund is too large or too small, it is difficult for fund managers to give full play to their operational level.

Flexibility principle of transaction

The redemption application of most money funds is very flexible, and they can be redeemed at any time, but some money funds are fixed, such as 30 days or 90 days.