Money funds are one of the types of funds, with high security and stable income. Investors will basically not lose money when investing in money funds, so some investors have doubts. Why don't money funds lose money? This is actually related to the investment targets of money funds. Let's continue to read the following.
why won't the money fund lose money?
The assets of the Monetary Fund are invested in instruments such as central bank bills, short-term treasury bonds, corporate bonds, commercial bills, bank time deposit certificates, etc. These are products with less risk and the probability of default is relatively small, so the income of the Monetary Fund is stable and there will be no loss.
However, this does not mean that the Monetary Fund will not lose money. If the Monetary Fund suddenly redeems in a large amount, the bonds that the Monetary Fund could have held due profits can only be sold in large quantities at a loss, and then the Monetary Fund may lose money.
besides money fund is a fixed-income fund, bond fund is also a fixed-income fund, but the biggest difference between them lies in the difference of credit risk. The credit risk of money fund is small, and the credit risk of bond fund is large, so the risk of bond fund is higher than that of money fund. Of course, high-quality bond fund can also provide stable income without considering credit risk.
generally speaking, the money fund is not without loss, but the probability of loss is low. The money fund can be used as a beginner's product for financial management. Novices can deposit their funds in money funds such as Yu 'ebao and Coin Pass, and Yu 'ebao and Coin Pass can be taken at any time, which is very convenient.