The main advantage of capital preservation fund is that it has higher principal guarantee than other high-risk investment methods. This kind of guarantee gives investors a sense of security like insurance and gives them psychological support in a bear market. However, the disadvantage of capital preservation fund is that it usually provides a lower rate of return. This is because most of the funds are used to achieve the purpose of capital preservation, rather than pursuing the highest income. In addition, the management cost of capital preservation funds is often higher because the capital preservation strategy is usually more complicated than other funds.
When choosing a capital preservation fund, we must first understand the investment strategy of the product, the experience and performance of the fund manager, etc. Secondly, investors should also know the calculation methods of various expenses, such as subscription fee, redemption fee, management fee and so on. Finally, investors should study the historical data and performance of the fund in detail to ensure the long-term income and capital guarantee of their investment. In short, investors should pay more attention when investing in capital preservation funds to ensure that they make wise investment decisions.