Features:
1. The main difference between money market funds and other funds that invest in stocks is that the net asset value of each fund unit is fixed, usually 1 yuan per fund unit. After investors invest in this fund, they can reinvest with the proceeds, and the investment income will accumulate continuously to increase the fund share owned by investors. For example, an investor who invests in a money market fund of 100 yuan can own 100 fund shares. After 1 year, if the return on investment is 8%, the investor will have 8 more fund shares, totaling 108, with a value of 108 yuan.
2. The standard to measure the performance of money market funds is the rate of return, which is different from other funds that gain income through the appreciation of net assets.
3. Good liquidity and high capital security. These characteristics are mainly due to the fact that the money market is a low-risk and high-liquidity market. At the same time, investors can transfer the fund shares at any time as needed, regardless of the maturity date.
4. Low risk. The term of money market instruments is usually very short, and the average term of money market fund portfolio is usually 4 ~ 6 months, so the risk is low, and its price is usually only affected by market interest rate.
5. The investment cost is low. Money market funds usually do not charge redemption fees and have low management fees. The annual management fee of money market funds is about 0.25% ~ 1% of the fund's net asset value, which is lower than the traditional annual management fee 1% ~ 2.5%.
6. Money market funds are all open-end funds. Money market funds are usually regarded as risk-free or low-risk investment tools, which are suitable for short-term capital investment to earn interest in case of emergency, especially in the case of high interest rate, high inflation rate, reduced liquidity of securities and reduced credibility, which can prevent the loss of principal.
The bank's wealth management products may have a slightly higher yield, but the liquidity is not good. If the wealth management product is half a year, it cannot be retrieved in advance. After the short-term wealth management products (such as 3 months) expire, they will be returned to the account in cash, and the interest will still be paid according to the current period. We have to wait until another wealth management product is released, which will cause interest loss. This problem does not exist in the cargo base. Good liquidity, redemption at any time, does not affect the income.
In addition, when the stock base of a fund company is purchased, it can be converted into an index fund or an equity fund within the framework of online trading of the fund company when the stock market rises sharply, so as to obtain high returns. This is an incomparable advantage of wealth management products.
Investment is made with your hard-earned money, so you have to make your own decisions. The above suggestions are for reference only. I hope it helps you.