There is only one way for money funds to pay dividends-dividends are transferred to investment. Each money market fund is always maintained at 1 yuan. If it exceeds 1 yuan, the income will be automatically converted into fund shares on time, and you will have as many assets as you have fund shares. Other open-end funds have fixed shares and accumulated net unit value, and investors can only rely on the annual dividends of the fund to realize their income.
Characteristics of money market funds
1. The main difference between money market funds and other funds that invest in stocks is that the net asset value of each fund unit is fixed, 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, an investor who invests in a money market fund of 100 yuan can own 100 fund shares. 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.
2. The standard to measure the performance of money market funds is the rate of return, which is different from other funds that gain income through the appreciation of net assets.
3. 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 the fund shares at any time as needed, regardless of the maturity date.
4. Low risk. The term of money market instruments is usually very short, and the average term of money market fund portfolio is usually 4 ~ 6 months, so the risk is low, and its price is usually only affected by market interest rate.
5. The investment cost is low. Money market funds usually do not charge redemption fees and have low management fees. The annual management fee of money market funds is about 0.25% ~ 1% of the fund's net asset value, which is lower than the traditional annual management fee 1% ~ 2.5%.
6. Money market funds are all open-end funds. Money market funds are usually regarded as risk-free or low-risk investment tools, which are suitable for short-term capital investment to earn interest in case of emergency, especially in the case of high interest rate, high inflation rate, reduced liquidity of securities and reduced credibility, which can prevent the loss of principal.
Characteristics of money market funds
Money market fund is a kind of fund at first, and it is also a fund that specializes in investing in money market instruments. Compared with general funds, money market funds have the following investment characteristics besides expert financial management and diversified investment:
1, money market * * * The same fund invests in high-quality securities portfolio in the money market.
2. The money market provides the IMF with a limited deposit account.
3. There are relatively few legal restrictions on money markets and funds.