Monetary fund is an open-end fund. According to the types of financial products invested by open-end funds, people divide open-end funds into four basic types: stock funds, hybrid funds, bond funds and monetary funds. The first two belong to the capital market, and the latter is the money market.
Monetary funds mainly invest in short-term financial products with high security, such as bonds, central bank bills, repurchase, etc. , also known as "quasi-savings products". Their main features are "worry-free principal, convenient demand, regular income, daily income and monthly dividend". Money funds only invest in the money market, such as short-term government bonds, repurchase, central bank bills, bank deposits, etc. And there is basically no risk. Its liquidity is second only to bank demand deposits, and its income is calculated every day. Generally, the one-month income is carried forward to the fund share, and the income is slightly higher than the one-year time deposit, and the interest is tax-free. The principal of the Monetary Fund is relatively safe, with an expected annual rate of return of 3.9%. It is suitable for liquid investment tools and a substitute for savings.
Monetary funds can be divided into Class A and Class B according to the size limit of participating funds. Class A is for small and medium investors, and Class B is for institutions and large investors. The minimum subscription limit of class A monetary funds is generally 1 1,000, and that of class B is 5 million. Their sales service rates are also different. For example, the annual sales service rate of Haifutong currency classification is 0.25%; The B-year sales service rate of Haifutong Currency is 0.0 1%.
The main difference between money funds and other funds that invest in stocks is that the net asset value of each fund unit is fixed, which is 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, investors can own 100 fund shares if they invest 100 yuan. 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.
The standard to measure the performance of money funds is the rate of return, which is different from other funds that make profits by increasing their net assets.
Monetary funds have 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 fund shares at any time as needed, regardless of the date.
The risk of money fund is low. The maturity of money market instruments is usually very short, and the average maturity of money fund portfolio is usually 4 ~ 6 months, so the risk is low, and its price is usually only affected by market interest rate.
The investment cost is low. Money funds usually don't charge redemption fees and have low management fees. The annual management fee of the money fund is about 0.25% ~ 1% of the fund's net asset value, which is lower than the traditional annual management fee 1% ~ 2.5%.
Money funds are all open-end funds. Money funds are usually regarded as risk-free or low-risk investment tools, which are suitable for short-term capital investment in emergencies to earn interest, especially in the case of high interest rate, high inflation rate, reduced liquidity of securities and reduced credibility, which can avoid the loss of principal.