What does capital preservation fund mean?
Capital preservation fund: a capital preservation fund that provides a certain proportion of investment principal within a certain period of time. Funds use interest or a very small proportion of assets to engage in high-risk investments, and most assets are engaged in fixed-income investments, so that no matter how the market of fund investment falls, it will not be lower than the guaranteed price, thus achieving the so-called "guaranteed" effect.
Internationally, the capital preservation fund can be divided into two types: guarantee fund and guarantee fund, in which the guarantee fund does not need a third party to provide guarantee. Generally speaking, a capital preservation fund invests most of its assets in fixed-income bonds, so as to pay the investor's principal when the fund expires, and the remaining assets are about 15%-20% invested in stocks and other tools to improve the return potential.
What are the characteristics of capital preservation funds?
Capital preservation fund is a low-risk fund. Among all the existing fund products, the investment risk of the capital preservation fund is the lowest, because the capital preservation fund ensures that investors get the principal protection when holding the fund. Specifically, the capital preservation fund has the following characteristics:
1, value-added potential
By investing in stocks or various financial derivatives, capital preservation funds can ensure the safety of investors' principal and share the benefits of the securities market. Compared with bank deposits or national debt investment, capital preservation funds have higher appreciation potential, and have higher expected returns while ensuring the principal return.
2. Semi-closed
The capital preservation fund stipulates a guarantee period, and fund holders can only get the guarantee of capital preservation when they hold the capital preservation fund, but they can't get the guarantee of capital preservation when they redeem it during the guarantee period. Investors should not only bear the risk of fund net value fluctuation, but also pay higher redemption fee. In addition, the subscription of funds is generally not accepted during the warranty period. This semi-closed nature makes the capital preservation fund more suitable for investors who aim at medium and long-term investment.
3. Principal guarantee
Because the core feature of the capital preservation fund is that investors can get the principal guarantee when the fund expires, investors can avoid the loss of principal by investing in the capital preservation fund. In terms of risk characteristics, the investment risk of capital preservation fund is obviously lower than that of other funds, which is especially suitable for those investors who can't afford the loss of principal but want to participate in the securities market investment to a certain extent.
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