Hello, the money fund invests in short-term bonds. For example, there is a money fund that holds one-year bonds, half-year bonds and one-month bonds. The maturity dates of these bonds are different, and the closer to the maturity date, the lower the yield. Therefore, in order to improve the income, the Monetary Fund tries to hold bonds with longer maturities. This will lead to liquidity risk and increase the risk of the fund. Because the income of these bonds is average every day, sometimes we see that the income of the money fund suddenly rises one day, that is, the bonds are sold on that day, and its income structure has changed.

The term of short-term bonds invested by money market funds is 397 days (13 months), because the issuance and redemption of bonds are usually affected by holiday factors. If it is limited to 365 days, it may lead to the inability to participate in the bidding or purchase of bonds, and this problem can be avoided. In fact, the remaining 397-day and 365-day maturities will not have much impact on the returns, risks and liquidity of bonds. Judging from the current situation in China, the stock of short-term varieties limited to 397 days will be more, and the operation of funds will be relatively easier.

In order to prevent the issuance and redemption of bonds from being affected by holidays, "one year" is added to "within one year". Why 397 days? This is due to leap years.

Please accept it if it helps. Thank you.