Although the money fund is the lowest risk and the easiest to invest, many investors only pay attention to the expected return when buying the money fund, ignoring another reference indicator, namely the liquidity of the money fund. This small series will talk about the liquidity of the money fund.

The so-called liquidity risk refers to the risk that the fund manager fails to realize the fund assets in time to deal with the investor's redemption application. In essence, it is the matching between the liquidity of fund portfolio assets and the redemption demand of investors.

For the money fund, although it does not invest in stocks, the potential risks brought by the liquidity of the money fund still exist. For example, in June 5438+mid-February last year, due to the reappearance of the "money shortage" in the market, institutional investors led by banks redeemed the shares of money funds on a large scale, resulting in large fluctuations in the net value of many money funds.

There are rumors in the market that it is the above turmoil that has led to a series of regulatory indicators for monetary funds in the New Regulations on Liquidity Management.

Why does the IMF have so many indicators to monitor "liquidity"? This reflects the deep love of the CSRC for the people who eat melons! We should know that all money funds are investors with low risk tolerance, and many money funds are directly linked to "baby" products. Many post-80s and post-90s people regard these "babies" as current deposits, so if the liquidity is not good, something will happen.

On the other hand, if a money fund is better at liquidity management, its "baby" can stand the liquidity test of the money fund.

In terms of liquidity management, the money fund is originally a cash management tool with low risk and stable expected income, with a gap of only one millimeter. If the "big family" enters too concentrated when the liquidity is fragile, it will obviously dilute the expected income of other investors.

Buying a money fund has low risk and stable expected income. The higher the expected return, the more it will be favored by all investors. However, while looking at the expected return, we should also look at liquidity. With liquidity, we can expect returns and successfully redeem them.

Most people who buy funds only look at expected returns, and investors are no exception to money funds. They often only focus on the expected return, but ignore the liquidity of the money fund. I hope you can gain something after reading this article. I wish you all the best in your investment and financial management.