Basic information on currency funds

1. What is a currency fund?

A currency fund is an open-end fund that invests in In terms of financial product categories, people divide open-end funds into four basic types: stock funds, hybrid funds, bond funds, and currency funds. The first two categories belong to the capital market, and the latter category belongs to the money market. Monetary funds mainly invest in extremely safe short-term financial products such as bonds, central bank bills, and repurchases. They are also known as "quasi-savings products." Their main characteristics are "worry-free principal, convenient demand, regular income, and Diary earnings, monthly dividends”. Under normal circumstances, the probability of investors making a profit is 99.84%; the expected rate of return is between 1.8-2%, which is higher than the 1.8% interest on one-year time deposits, and there is no interest tax; it can be redeemed at any time, generally after application Funds will arrive the next day after redemption, which is very suitable for units and individuals pursuing low risk, high liquidity, and stable income.

2. What are the differences between currency funds and other open-end funds?

Compared with other funds, currency funds have the following characteristics:

l Currency funds The main difference between the fund and other funds that invest in stocks is that the net asset value of the fund unit is fixed, usually 1 yuan per fund unit. After investing in the fund, investors can reinvest the proceeds, and the investment income will continue to accumulate, increasing the fund shares owned by investors. For example, an investor who invests 100 yuan in a currency fund can own 100 fund units. After one year, if the investment return is 8%, then the investor will have 8 more fund units, for a total of 108 funds. Unit, value 108 yuan.

l The standard for measuring the performance of currency funds is the rate of return, which is different from other funds that make profits through the appreciation of net asset value.

l Monetary funds have good liquidity and high capital security. These characteristics mainly stem from the fact that the currency market is a low-risk, highly liquid market. At the same time, investors are not subject to date restrictions and can transfer fund units at any time as needed.

l Monetary funds have low risk. The maturity date of money market instruments is usually very short. The average maturity of money fund investment portfolio is generally 4 to 6 months, so the risk is low. Its price is usually only affected by market interest rates.

l Investment cost is low. Currency funds usually do not charge redemption fees, and their management fees are also low. The annual management fees of currency funds are approximately 0.25% to 1% of the fund's net asset value, which is lower than the traditional fund annual management fee of 1%. ~2.5%.

l Currency funds are all open-end funds. Currency funds are usually regarded as risk-free or low-risk investment tools. They are suitable for short-term investment of capital to generate interest for emergency needs, especially when interest rates are high, inflation is high, security liquidity decreases, and credibility is reduced. The principal is protected from loss.

3. What are the investment objects of currency funds?

Monetary funds are funds that invest in money market instruments. Mainly invest in the following financial instruments:

a) Cash;

b) Bank time deposits and certificates of deposit within one year (including one year);

c) Bonds with remaining maturity within 397 days (including 397 days);

d) Bond repurchase with maturity within one year (including one year); < /p>

e) Central bank bills with a maturity of less than one year (including one year);

f) Other money market instruments with good liquidity recognized by the China Securities Regulatory Commission and the People's Bank of China .

4. Is there a time limit for currency funds and how many days will it take for funds to arrive if redeemed?

Currency funds can be subscribed and redeemed at any time, except for statutory holidays. The fund has no time limit. Fund companies generally stipulate that it takes 2 trading days (T+2 day) for funds to be redeemed for shares.

5. The practical advantages of money funds

1) Increase the income of current savings. The current average income of money funds is about 1.8%, which is higher than the bank current savings interest rate of 0.58% ( after-tax earnings).

2) The practice of carrying forward income on a monthly basis provides compound interest income that currently cannot be provided by bank deposits.

3) Effectively avoid interest rate risks during the period of rising interest rates. The increase in interest rates has provided monetary funds with higher-yielding investment products. It can be said that the income of monetary funds has increased with the increase in interest rates. This has been confirmed before and after the interest rate hike in 2004.10.

6. How to purchase currency funds? Are there any fees?

The subscription and redemption of currency funds are completely free of charge. It can also be said that the currency fund is an open-end fund without any fees.

It is recommended to purchase from a securities company for the following reasons:

1) Purchasing currency funds is an investment behavior rather than a savings behavior. Buying funds from a securities company can provide you with professional personnel to provide you with the most timely and advantageous varieties. and the most accurate investment portfolio to maximize your returns;

2) The advanced "fund supermarket" system of individual securities companies can sell all domestic funds on an agency basis, and the one-stop service has changed the customer's original The purchase of different funds can only be done at specific banks, which reduces financial risks and procedures;

7. How to obtain the daily income of currency funds

You can pass the relevant You can check on the websites of financial and fund management companies, or through agency sales outlets.