Money market funds do not promise that the principal will not lose money at any time, nor do they guarantee the minimum rate of return.

Generally speaking, when the following two conditions are met at the same time, money market funds may lose their principal:

First, the market yield rose sharply in the short term, which led to a sharp drop in securities prices;

Second, the money fund redeemed a large number at the same time, unable to hold bonds with falling maturity prices, and caused actual losses after selling bonds.

According to relevant calculations, the probability of a single-day principal loss of money market funds is very small (0.06 1 17%). If you hold it for a week or a month, the probability of principal loss is close to zero.