what are the investment periods and risks of capital preservation funds

what are the investment periods and risks of capital preservation funds? How to resolve these risks? The following small series will tell you.

The capital preservation fund has finally ushered in its early days. With the upsurge of capital preservation funds, many investors of capital preservation funds are puzzled: Why did the capital preservation fund they bought fall instead of capital preservation? First of all, the capital preservation fund has an investment period. The capital preservation fund can not promise you capital preservation at any time. The capital preservation fund has a capital preservation period, and only in this capital preservation period can investors enjoy capital preservation treatment. Secondly, the capital preservation fund is not risk-free, and it also has the risk of affecting capital preservation.

investment period and risk of capital preservation fund 1. investment period of capital preservation fund:

generally speaking, capital preservation fund refers to a fund that provides a certain proportion of the principal invested by investors within the specified investment period. This kind of fund is really called capital preservation fund, but in fact it has some restrictions. For example, in terms of time limit, it is not always a capital preservation period when buying such funds. Such funds generally set up a capital preservation period. For example, most domestic capital preservation funds have a capital preservation period of three years, that is to say, investors can only enjoy the capital preservation treatment if they buy during the subscription period or the prescribed subscription period of the fund and hold a capital preservation period. If they redeem in the middle, the fund company does not promise to protect the capital.

at present, most domestic capital preservation funds stipulate that capital preservation can only be achieved if they are purchased during the subscription period, which is also the initial raising period. If you want to buy a capital preservation fund, it is best to buy it during the fund raising period. If you buy it after the fund raising period, you should first consult the bank wealth management manager or the customer service staff of the fund company to avoid buying a capital preservation fund that cannot be guaranteed.

the product structure determines that the investment period of capital preservation funds is relatively long, generally at least 3 years, and there are also 8-1 years of long-term capital preservation funds abroad. At present, domestic capital preservation funds have set a three-year capital preservation cycle. Investors should use capital preservation funds as long-term investment tools or hedging tools on the premise of meeting their short-term liquidity needs.

rate structure of capital preservation funds. At present, the subscription rate of capital preservation funds in China is not higher than 1%, and the redemption fee during the guarantee period decreases with the extension of the holding period. If the holding period expires, the redemption fee is ; The management rate of capital preservation fund is 1.2%, and the custody fee is .2%, which is lower than that of actively managed stock funds and slightly higher than that of bond funds.

investment period and risk of capital preservation fund ii. investment risk of capital preservation fund:

1. the market suddenly fell sharply in a short period of time, and the liquidity was extremely lost during the decline, so that the enlarged risk exposure broke through the net capital preservation line before it could be realized. For example, the US stock market "Black Monday" in 1987.

2. The investment target market is in a state of frequent and violent fluctuations, which leads to a large number of redemptions. The fund has to adjust the ratio between risky assets and fixed-income assets frequently, and the operating cost increases, which affects the realization of the capital preservation goal.

3. The fund manager's risk monitoring and internal control management are not strict, and the strategy is not strictly implemented, resulting in the failure to protect the capital when the fund investment expires. From the overall institutional arrangement, the prevention of investment risks of capital preservation funds can be effectively enhanced by introducing guarantee institutions for capital preservation funds.

the capital preservation fund is more suitable for investors who want to preserve and increase their assets but have low risk tolerance, while for investors with high risk tolerance, they mainly buy stock funds and other products. You should choose the capital preservation fund according to your actual situation, especially the risk tolerance, idle time of funds or the time to achieve financial goals. The capital preservation period of capital preservation funds is generally at least 2 years, mostly 3 years. Some foreign capital preservation funds can even last for more than 78 years, so the liquidity is poor. It is best for investors to fully consider the possible use time of the invested funds before purchasing, so as not to delay the use or cause financial losses.