Money market funds are investment funds that invest in the money market (within one year, with an average term of 120 days). Mainly invest in short-term monetary instruments, such as treasury bonds, large negotiable certificates of deposit, commercial bills, corporate bonds and other short-term varieties. Compared with traditional funds, it has the following characteristics:

First of all, the net asset value of money market funds is fixed. Generally, a fund unit is 1 yuan, which is the main difference from other funds. After investors invest in money market funds, they can reinvest with the proceeds, increase the fund share and accumulate investment income.

Secondly, the evaluation standard of money market funds is the rate of return, which is different from other funds that make profits through the appreciation of net assets.

Thirdly, money market funds have good liquidity and high security, because the money market is a low-risk and high-liquidity market.

Finally, money market funds have low risks and low investment costs. The term of money market instruments is usually very short, and the average term of money market fund portfolio is usually 4~6 months, so the risk is low, and its price is usually only affected by market interest rate. Money market funds usually do not charge redemption fees and have low management fees. The annual management fee of money market funds is about 0.25%~ 1% of the fund's net asset value, which is much lower than the traditional annual management fee 1%~2.5%.

Money market funds not only have the characteristics of stable income, strong liquidity, low subscription limit and high capital security, but also have other advantages, such as issuing checks and paying consumer bills with fund accounts; It is usually used as a place to temporarily store cash before making new investments, which can earn more income than demand deposits and can be withdrawn for investment at any time. Some investors subscribe for money market funds in large quantities and then gradually redeem their investment stocks, bonds or other types of funds. Many investors also hold cash in the form of money market funds for emergencies. Some money market funds even allow investors to withdraw funds directly from ATMs.