Money fund is the choice of most investors because of its low risk, low threshold and relatively stable income. But if it is a project investment, there will be risks, and so will the money fund. Then why is the money fund also risky?

Why are money funds also risky?

Money funds usually have certain corresponding risks, but for investment varieties such as stocks, the risks are relatively small. For the capital risk in the money market, it is mainly caused by the short-term bonds invested accordingly and the changes in the interest rate of funds under the current market situation, which will also lead to the fluctuation of the price of the money fund.

Money funds are usually open-end funds, which are usually divided into four different fund types. Compared with other investment and wealth management products, the net asset value of the fund unit remains unchanged. After investors choose to invest in the fund, they can continue to invest with relative capital gains, thus obtaining higher returns.

The overall liquidity of the money fund is good and the relative risk is low, mainly because the money market is a low-risk and ultra-high-liquidity financial market. The maturity date of instruments in a specific money market is relatively short, and the price of money funds is usually only affected by the current market interest rate, and the corresponding redemption fee will not be charged, which makes its investment cost lower.