Funds can be divided into many types according to different standards. If divided according to investment targets, they can be divided into stock funds and currency funds. Many investors do not know much about these two types of funds. Let’s take a look at their characteristics.
What's the difference.
What is the difference between stock-biased funds and money funds? 1. The investment targets are different. Stock-biased funds are funds that mainly invest in stocks; money funds invest in short-term monetary instruments, such as treasury bonds, central bank bills, commercial bills, and bank fixed-term funds.
Certificate of deposit, etc.
2. The income is different. The income of stock-oriented funds is very large, and the annual income can generally reach about 20%; the average annual income of currency funds is about 3.6%, and it can reach about 5% if done well.
3. The risks are different. Stock-oriented funds are also very risky, and the returns may be negative in a year; monetary funds are very risky, and basically will not lose money. It can be understood that capital is guaranteed.
How should investors choose between stock funds and currency funds?
Choose based on your actual situation. The stock type mainly invests in stocks. Under normal circumstances, the market conditions are similar to those of the stock market. The risks are high, but the returns are also large. It is recommended to invest your spare money in this type of fund.
Monetary funds are used to make money. The risks are small but the returns are not large. They are relatively safe. It is recommended that the funds reserved for emergency use can be used as funds in this area and accumulated slowly.
After reading the above introduction, I believe everyone has a better understanding of the difference between stock-focused funds and currency funds.
Generally speaking, the risk and return of a fund are normally proportional. Before buying a fund, you should conduct a risk assessment on yourself to see how much risk you can bear before making a choice.