Moreover, when investors invest in bonds, they also need to choose bond funds according to their different needs and risk preferences, whether to choose pure debt funds, primary debt funds, secondary debt funds or convertible bonds funds. After all, the same variety of investment funds will have different risks and different returns due to different investment targets.
It is also necessary to look at the historical performance rankings of bond funds to refer to the previous fund performance, so as to choose bond funds with greater investment value according to the rankings of funds in recent years. Investors can also observe the risk control ability of fund managers by observing the net withdrawal ratio of bond funds. Usually, under the same basic conditions, the smaller the net withdrawal ratio, the stronger the risk control ability of fund managers.
The main difference between money funds and bond funds lies in the different investment objects.
Money fund is an open-end fund, which invests in the money market, mainly investing in bonds, central bank bills, repurchase and other short-term wealth management products with high security; Bond funds are funds that invest in bonds, mainly treasury bonds, financial bonds and corporate bonds.
The income of the money fund is only higher than the interest rate of bank time deposits, but there is no interest tax. You can redeem it at any time, and generally you will receive the funds the next day after applying for redemption. Therefore, the money fund is very suitable for units and individuals who pursue low risk, high liquidity and stable income. These two products have their own advantages.
As the king of cash management, money fund has high security, high liquidity and stable income, which is similar to "quasi-savings" and always blooms the charm of investment. According to the data of Galaxy Securities Fund Research Center, as of July 29th, 20 14, the average annual income of 49 A-level money funds in 20 14 was 1.8354%.
Since July, some banks have unilaterally terminated the long-term wealth management products when they were established. In addition, the subscription and expiration time of wealth management products is usually long, which reduces the actual income level of investors, while the regulatory authorities have restricted the financing trust products, which will also reduce the investment scope of the original short-term wealth management products, thus reducing their income level.
Because the average term of assets allocated by the money fund is short, the assets of the fund can be accumulated in a very short time. Moreover, the funds due to be paid will soon be invested in short-term bonds, central bank bills, agreement deposits and other varieties with higher returns after raising interest rates, thus rapidly increasing the income of the money fund. Therefore, for investors, money funds are suitable for phased allocation, with low risk and good returns.
The two main factors affecting the performance of bond funds are interest rate risk, that is, the sensitivity of the bonds invested to interest rate changes (also known as duration) and credit risk. When choosing a bond fund, we must understand its interest rate sensitivity and credit quality. On this basis, we can understand how high the risk of the fund is and whether it meets your investment needs.