In fact, the biggest difference between money funds and index funds is mainly in the investment direction. Simply put, the money fund is actually a tool to put money into the money market. Index funds invest in all or part of the constituent stocks of the index. There are obvious differences between the two funds in investment direction.
Second, the risks are different.
We will consider risks when making any investment, and the difference between money funds and index funds is also reflected in risks. Monetary fund is a short-term monetary tool, and its risk coefficient and safety are very reliable. Index funds are composed of all or part of constituent stocks, so the risk is higher than that of money funds.
Third, the benefits of buying funds.
After understanding the difference between money funds and index funds, let's talk about the benefits of buying funds. Unlike stock trading, the fund has a professional team to help investors manage assets, so the investment risk is very small. You don't need to learn too much professional knowledge, and anyone can choose to buy funds to invest.
The difference between money fund and index fund is mainly reflected in the above aspects. Although the money fund is less risky, the risks and benefits of any investment and financial management are directly proportional. Therefore, buying index funds is often higher than money funds in terms of income.
Index funds are fund products with specific indexes (such as SSE 50 Index, CSI 300 Index, S&P 500 Index, NASDAQ 100 Index, Nikkei 225 Index, etc.). ) as the underlying index, and take the constituent stocks of the index as the investment object, build a portfolio by buying all or part of the constituent stocks of the index, and track the performance of the underlying index.
Monetary fund is an open-end fund that collects idle social funds, is operated by fund managers and kept by fund custodians. It specializes in investing in low-risk money market instruments, which is different from other types of open-end funds. It has the characteristics of high security, high liquidity, stable income and "quasi-savings".
From the perspective of investment targets, index funds invest in stocks and money funds invest in money markets.
In terms of risk, the risk of index funds is much greater than that of money funds.