Difference 1: investment scope
As the name implies, money funds are funds that invest in the money market. Monetary funds mainly invest in cash, bank deposits, government bonds, certificates of deposit, etc.
Bond funds are funds that invest in the bond market, such as corporate bonds, government bonds, corporate bonds and convertible bonds. From the investment direction, the risk of bond funds is greater than that of money funds, because bond funds are affected by interest rate risk.
Difference 2: Expected return of risk
Monetary funds are characterized by low risk and stable expected returns, and losses will only occur in extreme markets. Therefore, the expected return of the money fund will not fluctuate greatly in the long run.
The investment risk of bond funds is greater than that of money funds, and its expected return will be higher. The expected return calculation of bond funds is related to the daily unit net value, which means that there may be losses in the short term.
Variance 3: Administrative expenses
The subscription and redemption of money funds are free. Buyers only need to pay management fees and custody fees, and the fees of money funds are the lowest among all funds.
Bond funds need to charge subscription fees and redemption fees, and management fees and custody fees are also mandatory items, so the cost of bond funds is much higher than that of money funds.
Difference 4: Applicable people
Money funds are suitable for idle investment, with high short-term liquidity, but low expected returns from long-term holding.
The expected return and risk of bond funds are moderate, which is suitable for investors who pursue higher expected return.
The difference between money funds and bond funds is obvious. When investing in funds, the product details will also introduce the types of funds. In a word, no matter what fund you invest in, it is risky. Please invest rationally and diversify your investment.