Monetary fund is an open-end fund that collects idle social funds, is operated by fund managers and kept by fund custodians. It specializes in investing in low-risk money market instruments, which is different from other types of open-end funds. It has the characteristics of high security, high liquidity, stable expected annualized expected return and "quasi-savings".

The operation principle of the money fund is to pool the money of small and medium investors and invest it in the market such as bank deposit certificates and bond markets. Where it is inconvenient for investors to invest or where the threshold is high, so as to obtain returns.

Monetary funds generally invest in short-term monetary instruments, including short-term government bonds, central bank bills, financial bonds and so on. And also put a lot of money in the bank in the form of interbank deposits.

In the early stage of the development of domestic monetary funds, bonds and bills, asset buying and selling back are the main types of monetary fund investment. In recent years, with the increasing scale of monetary funds, more and more assets of monetary funds are allocated in deposits.

Expected annualized interest rate of short-term bills, deposits, etc. Will follow the market. If funds are tight, the annualized interest rate is expected to rise. For example, if an investor deposits 654.38 million yuan, it is impossible to talk about the deposit price with the bank; However, if the fund holds 65.438 billion yuan, it is possible to obtain a higher expected annualized interest rate.

Therefore, the money fund can realize the expected annualized expected return higher than the current demand.