Money funds mainly invest in money markets, such as deposits, certificates of deposit, short-term bonds and central bank bills. Monetary fund has the characteristics of good liquidity and high security.
Bond funds refer to funds that mainly invest in bonds, and the bond investment ratio is not less than 80% of the fund assets. The risk and return of bond funds are determined by the bonds invested, and the risk and return of bond funds are relatively low, so the risk of bond funds is relatively low.
FOF funds invest in a basket of funds, which can fully spread risks, so the risk of FOF funds is relatively low.
How do novices buy funds?
1. First, make clear the types of funds. The easiest way is to look at the investment target. In other words, the fund invests in stocks (equity funds), bonds (bond funds), stock bonds (balanced funds) or money market funds. The expected returns and risks of the above-mentioned types of funds are stock-type, balanced-type, bond-type and money-market funds from high to low.
2. Secondly, who is the fund manager? The trading qualification, stock selection concept and stability of fund managers will all affect the performance of funds. It is suggested to inquire about the basic information and qualifications of fund managers on the websites of fund companies first, and learn more about the style and past performance of fund managers.
3. Third, understand the risk coefficient. Risk coefficient is an index to evaluate fund risk, which is usually expressed by standard deviation, beta coefficient and Sharp index. Beginners only need to master the following principles: the smaller the "standard deviation", the smaller the risk of fluctuation; "Beta coefficient" is less than 1, so the risk is smaller; The higher the sharpness index, the better. The higher the index, the higher the return of the fund after considering risk factors, which is more beneficial to investors.
4. Finally, find out the significance of fund performance trend outperforming the broader market. The significance of "comparison chart of fund and market trend" is to let investors check whether the long-term performance of the fund outperforms the market. So this chart should be a complete chart based on the establishment date. In addition, you can also compare the fluctuation range of the fund trend.
5. If the fluctuation of the fund is greater than that of the market, it means that the fluctuation of the fund is greater than that of the market and the risk is relatively greater. On the other hand, in fact, some funds are not suitable for comparison with the broader market, and there is a problem of choosing a suitable benchmark for comparative performance.
6. For example, many foundations invest in some bonds. In this case, it is inappropriate to use the market index completely when choosing the performance comparison benchmark, and the comparison will be misleading.