We might as well make a simple comparison between short-term debt funds and money market funds. At present, there are only two short-term and medium-term debt funds in the market-Bo Shi No.6 and Yifangda, which have not been established for a long time, and the earliest Bo Shi No.6 is less than four months. The history of the money fund is much longer. After its birth at the end of 2003, together with the newly established Great Wall Monetary Fund, the size of the "family" has reached 26.

Short-and medium-term debt funds, like money funds, are exempt from subscription and redemption fees, and the fund redemption money can be received in T+ 1 or T+2 days. The investment scope has nothing to do with stocks. The short-term and medium-term debt funds invest in bonds within three years, which greatly exceeds the portfolio investment period of the money fund. For this reason, the short-term and medium-term debt funds are called "enhanced version of the money fund" as soon as they come out.

Differences that cannot be ignored

Although similar, there are still differences between the two funds, mainly reflected in the rate of return and risk.

From the perspective of investment period, the risks and benefits of short-and medium-term debt funds will inevitably exceed those of money funds. Comparable is the annualized rate of return. As of 12 and 13, the 90-day annualized net growth rate of Bo Shi No.6 is 2.234%, while the 7-day annualized income of most money funds is around 2%. There is also a data that can explain the problem. 13 February 13 market interest rate 1 year 1.49%, 3-year 2.28%, showing a theoretical income level of money funds and short-term debt funds. Of course, some money funds have performed well recently, and the yield even exceeds the short-term and medium-term debt base, which is related to the types of bonds they hold.

In the two asset valuations, there is an amendment clause, that is, the fund should revalue the valuation objects held by the fund by using market interest rate, market quotation and transaction market price every trading day. When there is a big deviation between the re-evaluated net asset value of the fund and the net asset value calculated by amortized cost method, relevant adjustments should be made to make the net asset value of the fund reflect the value of the fund more fairly. When this deviation occurs, the risks are different. Short-term and medium-term debt funds are more sensitive to short-term changes in market interest rates than money funds, that is, short-term fluctuations will be more obvious.

Depending on the funding arrangements

Therefore, which fund to invest in, in addition to the rate of return, also need to consider the degree of risk.

There is an intuitive way to measure it. As for the income indicators, the Monetary Fund said "7-day annualized rate of return" and Bo Shi No.6 said "90-day annualized rate of return". It can be simply considered that money funds are more suitable for funds with a 7-day use cycle, while funds suitable for short-term funds have a use cycle of more than one quarter.

For Ms. Liu, if the funds are prepared for more than one quarter, she may wish to invest in short-term and medium-term debt funds and enjoy higher returns; However, if there is an urgent need during the period, it is better to buy a money fund to avoid redeeming short-term debt funds just when the net value is low.

At present, the biggest concern of regulators about short-term and medium-term debt funds is that they are afraid of repeating the mistakes of money funds. Prior to this, the Measures for the Administration of Monetary Funds came into being because many monetary funds played "edge ball" in pursuit of high returns, which led to the accumulation of risks. However, if we tailor the rules for short-term and medium-term debt funds according to the monetary fund, as analyzed by a fund industry analyst, with the segmentation of the bond market, there will be funds with a portfolio duration of two to four years. Do we need to make new rules? The liquidity risk that short-term and medium-term debt funds may bring to the inter-bank bond market is another concern of the market.