In general, the expected annualized income of money market funds is higher than the expected annualized interest rate of bank demand deposits. Therefore, before the long holiday, many idle funds may concentrate on buying money market funds in order to pursue the short-term expected annualized expected return during the holiday.
However, during the long holiday, the investment targets of money market funds are closed, and there are only a few trading days before the long holiday, so it is difficult for fund managers to effectively allocate a large amount of concentrated cash in a short time. According to the Notice on Issues Related to Money Market Fund Investment issued by China Securities Regulatory Commission, the fund shares subscribed on the same day will enjoy the distribution right of the fund from the next working day.
Therefore, if a large amount of money is used to buy money market funds in a short period of time during the holiday, it may cause the newly purchased funds to dilute the expected annualized expected income of the original money fund holders. Therefore, before the long holiday, money market funds take measures to suspend subscription, which is a measure to protect the interests of existing fund holders and treat new and old investors fairly.
Money market fund is a good cash management tool, and investors should pay attention to its liquidity and risk control ability when choosing money market fund. Money market funds also have investment risks, and investors should not treat them as risk-free products for short-term arbitrage.
What monetary funds can I subscribe for in Mid-Autumn Festival?