In the quarterly report, money market funds will disclose the times when the absolute value of deviation is above 0.5%, the times when the absolute value of deviation is between 0.25% and 0.5%, the highest value of deviation, the lowest value of deviation and the simple average value of absolute value of deviation every working day. On the one hand, this provision can narrow the gap between the net value calculated by the cost of the money fund and the actual net value calculated by the market price, so that the valuation of the money fund can go hand in hand with the market trend, and institutions can avoid using the gap between them to suddenly increase the rate of return; On the other hand, it can also avoid investor arbitrage and treat new and old holders fairly.
The amortized cost method is a method to calculate the rate of return according to the cost, while the shadow pricing method is to calculate the fair rate of return of bonds with different maturities according to the price information of the market on that day, and use these fair rates of return to evaluate the fund portfolio. Because the market price fluctuates constantly, the rate of return obtained is different from that obtained by amortized cost method.
Generally speaking, the positive deviation between amortized cost method and shadow pricing method is good. To some extent, this shows that the market price of investment products held by the fund has risen, which has gained more benefits for investors. However, we should not hold the mentality of "the bigger the positive deviation, the better", and investors must also pay attention to liquidity risks. For some funds with large deviation and frequent deviation, investors should read their portfolios carefully, or simply call the fund company to understand the reasons for their high deviation and frequent deviation, so as to judge the risks.
Negative deviation does not mean negative returns, and if fund holders hold these negative deviation bonds to maturity, they will not cause negative returns. Experts explained that the negative deviation occurred because the price of money market fund portfolio securities fell due to the increase in market yield. Shadow pricing deviation is an important means to measure the risk of money market funds, and its purpose is to ensure that the valuation of money market funds can basically keep up with market fluctuations. Therefore, negative deviation means that the actual value of the fund portfolio is lower than the book value, but it does not mean negative returns. With the gradual stabilization of the fund scale and the structural adjustment of the fund portfolio, the problem of negative deviation will be gradually alleviated.