Characteristics of monetary fund
Monetary fund is an open-end fund, which is specially used to invest in the low-risk monetary instrument market. It has the characteristics of high security, high liquidity and very stable expected income.
Taking Yu 'ebao as an example, the annualized expected rate of return is basically maintained at around 4%, which is quite different from other bond funds.
In addition, the money fund also has the title of "quasi-savings", and it only takes one working day or even some products to arrive in real time. It can be said that it enjoys the convenience of bank demand but has the same expected income on a regular basis.
Maybe you will ask, is the money fund that perfect? Actually, it isn't, and it may lose money if:
1. Financial crisis
The money fund and the money market are closely related. If there is a major financial crisis that may endanger the normal order of the money market, then the money fund will naturally be affected.
2. Mass redemption
If a large number of users suddenly redeem the money fund, the transaction amount will be huge and a run crisis will occur.
Fund companies may choose to sell unexpired bonds to meet the needs of investors. Once a large number of bonds flood into the secondary market, based on the principle of supply and demand, the transaction price of bonds will become lower.
In this way, the net value of the money fund may fall below 1 yuan, which is a loss.
Summary: Of course, the probability of these two situations is very small, so you can rest assured ~
After all, any investment has risks, and the money fund is still a very good choice.