In the financial market, bonds are a very important investment tool. There are many kinds of bonds, including short-term bonds and long-term bonds. So what is the difference between short-term debt and medium-and long-term debt? Analyze this problem from multiple angles. The following is the difference between short-term debt and medium-and long-term debt brought by Bian Xiao. I hope it will help everyone!

What is the difference between short-term debt and medium-and long-term debt?

1. Issue date

The issuance period of short-term bonds is generally within one year, while the issuance period of medium-and long-term bonds is between 1 and 10 years. The length of the issue period directly affects the degree of risk of bonds. Short-term debt is short, the risk is relatively small and the income is relatively low; The medium-and long-term debt has a long term and relatively high risk, but the income is also relatively high.

2. Output

The yields of short-term debt and medium-and long-term debt are also different. Generally speaking, the yield of short-term debt is low, because their maturity is short and investors' risk is relatively small. The yield of medium and long-term bonds is relatively high, because the term is long and the risk of investors is relatively large. But this is not absolute, and the rate of return will be affected by many factors such as market supply and demand and economic situation.

3. Asset liquidity

Liquidity refers to the difficulty of buying and selling bonds. Short-term debts are more liquid because they have shorter maturities and can be realized in a shorter time. The liquidity of medium and long-term bonds is relatively poor, because they have a long term, it takes a certain amount of time to buy and sell, and they may have to bear certain losses when selling.

4. Risk

The risk of short-term debts is relatively small, because they have a short term and the issuing company or institution is usually in good standing. The risk of medium and long-term bonds is relatively high, because of its long term, the market economy situation may change, which will affect the yield of bonds.

What's the difference between short-term bonds and long-term bonds?

1, different times

Short-term bonds are bonds issued to raise short-term funds. Generally, the term is within one year. Some medium-and long-term bonds circulating in the market with a maturity of less than one year are also regarded as short-term bonds.

Long-term bonds are bonds issued by issuers to raise long-term funds. Different countries have different standards for dividing the term of creditor's rights. Generally speaking, the repayment period of short-term bonds is less than 1 year, and the repayment period of medium-and long-term bonds or medium-term bonds is more than 1 year and less than1year. Long-term bonds with repayment period exceeding 10 years.

2. Different characteristics

The purpose of issuing long-term bonds is mainly to raise construction funds for large-scale projects and some long-term construction projects. China's economic construction bonds issued in 1954- 1958 are long-term bonds. Because of the long repayment period and poor liquidity, it is difficult for bondholders to convert it into cash.

Short-term bonds have the advantages of strong liquidity and low risk, so they are often welcomed by ordinary investors. However, its output is also very low.

3. Different functions

The massive issuance and circulation of short-term bonds also enables the central bank to use various monetary instruments to deal with bonds, thus achieving the purpose of regulating currency circulation and stabilizing financial markets.

The difference between short-term and long-term bond funds:

First, the holding period is different.

Short-term debt funds are called enhanced money funds, so you can see that short-term debt funds are more like current wealth management products, which support T+2 redemption and do not support the exact holding days. But in order to obtain income, it usually needs to be held for 6- 12 months.

Due to the long investment cycle, long-term debt funds usually need to hold 1-2 years, so they are awkward products.

Second, the rate of return is different.

The yield of short-term bond funds is higher than that of money fund products, and the net value has risen steadily.

Long-term debt funds are more sensitive to interest rates because they need to be held for a long time. Once the bank raises interest rates, its income will be directly affected. Therefore, the income of long-term bond funds may not be higher than that of short-term bond funds.

Third, the risks are different.

The biggest feature of short-term bond funds is short-term bonds, so the liquidity of funds is very strong and the investment risk is relatively small.

Long-term debt funds are vulnerable to interest rate fluctuations because of their long holding time. Once a bond defaults or interest is adjusted, its risk is greater than that of a short-term debt fund.

What is the difference between short-term debt and medium-and long-term debt?

Difference 1: The holding period is different.

Short-term debt fund is called an enhanced version of money fund, so we can see that short-term debt fund is more like a current wealth management product, which supports T+2 redemption and has no exact holding days. But in order to ensure the income, it is generally necessary to hold it for 6- 12 months.

Long-term debt fund is an embarrassing product, because its investment cycle is relatively long, and it usually needs to be held for 1-2 years.

Difference 2: The rate of return is different.

The yield of short-term debt funds is higher than that of money fund products, and the net value grows steadily.

Long-term debt funds are more sensitive to interest rates because they need to be held for a long time. Once the bank raises interest rates, its yield will be directly affected. Therefore, the income of long-term debt funds is not necessarily higher than that of short-term debt funds.

Difference 3: Different risks.

The main feature of short-term debt funds is to invest in short-term bonds, so that the liquidity of funds is very strong and the risk of investment is relatively small.

Long-term debt funds are vulnerable to interest rate fluctuations because of their long holding period. Once a bond defaults or interest is adjusted, the risk of a long-term debt fund is greater than that of a short-term debt fund.

What is the difference between short-term debt funds and medium-and long-term debt bases?

As a subclass of pure debt funds, the investment scope of short-term debt funds and medium-and long-term pure debt funds is limited to bonds, and convertible bonds are not invested (except for the pure debt part of convertible bonds that can be traded separately). Among them, the remaining maturity of bonds invested by short-term debt funds is generally within 1 year; The medium and long-term debt-based investment bonds have no time limit, and they can invest in both short-term bonds and long-term bonds. Generally, it mainly invests in medium and long-term bonds with more than 65,438+0 years.

It is precisely because of the different types of investment that the short-term debt base is different from the medium-and long-term debt base. On the whole, the risks and benefits of short-term debt funds are less than those of medium-and long-term pure debt funds.

According to wind's statistics, from 13 to the end of the first quarter of 2023, the annualized rate of return of short-term debt funds was 3.67%, with the highest withdrawal of-1.24%; In the same period, the annualized yield of medium and long-term debt base was 4.73%, and the maximum withdrawal was -3.27%.