Monetary fund is an open-end fund that collects idle social funds, is operated by fund managers and kept by fund custodians. It specializes in investing in low-risk money market instruments, which is different from other types of open-end funds. It has the characteristics of high security, high liquidity, stable income and "quasi-savings".
When times are hard, people will naturally look for assets with good security and strong liquidity. However, many financial assets are either too risky, illiquid or have low returns, which cannot meet the financial needs of investors.
At that time, Ruth Bant, director of the cash management department and credit analyst of the world's largest pension fund teacher annuity insurance company, had a genius idea after a thorough investigation of the financial services industry: he founded a * * * mutual fund called "savings fund company" at 197 1.
Most money market funds have the lowest risk among all kinds of funds, and money fund contracts generally do not guarantee the safety of principal, but in fact, due to the nature of funds, money funds rarely lose principal in reality. Generally speaking, money funds are regarded as cash equivalents.
Most money market funds generally have the income level of national debt investment. Money market funds can not only invest in investment tools that ordinary institutions can invest in, such as exchange repurchase, but also enter the inter-bank bond and repurchase market and the central bank bill market for investment. Its annual net rate of return can generally be compared with the one-year time deposit interest rate, which is higher than the income level of bank deposits in the same period. Moreover, money market funds can avoid hidden losses. When there is inflation, the real interest rate may be very low or even negative. Money market funds can keep abreast of interest rate changes and inflation trends and obtain stable and high returns.