Duration, also known as Macaulay duration, refers to the average duration of bonds, that is, the average time for bondholders to recover all principal and interest. Simply put, it is how long it takes for a bond to be paid off, and the duration can tell us. Duration is an important factor to measure the price fluctuation and risk of bond funds. Generally speaking, there are bonds with different interest rates, different maturities and different face values in the market. The existence of duration can roughly convert bonds with different characteristics into the same digital unit for intuitive comparison. Because a large proportion of the money fund's positions have bonds, the yield of the money fund also has a certain relationship with the yield to maturity of bonds.

Article 9 of the Measures for the Supervision and Administration of Money Market Funds: The average remaining period of a money market fund portfolio shall not exceed 120 days, and the average remaining duration shall not exceed 240 days.

In order to prevent interest rate risk, stricter requirements are put forward for the average remaining period of money market fund portfolio, which is reduced from 180 days to 120 days. This is also to ensure the liquidity of the portfolio and further reduce the duration risk. Generally speaking, the shorter the duration, the better the liquidity of the money fund. At the same time, the provision that the average remaining period of money market fund portfolio should not exceed 240 days has been added to limit money market funds from investing too much in floating interest rate bills with longer remaining period.

According to the regulations, the money fund can only invest in bonds with a remaining maturity of less than 397 days, but floating interest rate bills will have statements about the remaining maturity and remaining duration. Among them, the remaining term is calculated according to the floating range, and the remaining duration is calculated according to the actual duration of the bond.

Generally speaking, the longer the duration, the higher the yield, which may be the reason for trying to break through the upper limit of duration.