Do you buy a fund to protect your capital?
Buying a fund is not guaranteed, and investment funds are risky. Generally speaking, the common types of funds are as follows:
1. Money fund is a fund that invests in money market instruments, with the purpose of maintaining the security and liquidity of principal and providing stable income. The risk of money fund is very low, but it is not guaranteed.
2. Bond funds are funds that invest in bonds and other fixed-income assets. The risk of bond funds is lower than that of equity funds, but higher than that of money funds. The income of bond funds mainly comes from the interest and price changes of bonds, and bond funds do not guarantee the principal, because the price of bonds will fluctuate due to market interest rates, credit risks and other factors.
3. Equity funds are funds that invest in equity assets such as stocks, with the purpose of pursuing long-term capital appreciation. The risk of stock fund is higher than that of bond fund and money fund, and the price of stock will fluctuate due to many factors such as market, company and industry. Equity funds are not guaranteed, and their returns fluctuate greatly.
What fund has low risk?
There is no absolute answer to what fund has low risk, which is related to changes in market conditions. Generally speaking, the risk of a fund is directly proportional to its income, and the higher the income, the higher the risk. In terms of fund types, generally speaking, the risks of money funds and bond funds are lower than those of stock funds and hybrid funds, and the risks of index funds are related to the index or industry risks they track. Investors should choose according to their own risk tolerance, investment objectives and liquidity.