There are many types of funds, which are divided into bond funds, stock funds and so on. So is the short-term debt fund risky? Are short-term debt funds risky? The following small series has prepared relevant content for everyone's reference. I hope it will help everyone!

What is a short-term debt fund?

Short-term debt fund is a kind of fixed-income fund, which mainly invests in short-term and low-risk fixed-income securities, such as government bonds, policy financial bonds, local government bonds, bank certificates of deposit and so on. Generally, the maturity of these securities is within 1 year, with relatively small risk and stable fixed income performance, which is suitable for short-term investment.

The advantages of short-term debt funds are short investment period, relatively small risk and stable income. Due to the short term of the bonds held by the fund, it will not be affected by the sharp rise in interest rates, and at the same time it can obtain relatively stable fixed income. For the investment and fund management of short-term idle funds, short-term debt funds are a good choice.

Are short-term debt funds risky?

The risk of short-term debt funds is relatively small, but it is not without risk. Short-term debt funds also have some risks:

1. Interest rate risk: Although short-term debt funds are limited by the maturity of bonds held, which makes the interest rate risk smaller, they may still face interest rate risk under special circumstances, such as changes in external environment or fluctuations in macroeconomic situation.

2. Credit risk: The bonds invested by short-term debt funds come from different fields, such as enterprises and local governments. These institutions have different credit levels, so there may be a risk of default.

3. Liquidity risk: Short-term debt funds mainly invest in short-term fixed-income securities. If the market fluctuates greatly or the securities issuer faces difficulties, it will affect the liquidity of the fund and cannot meet the redemption needs of investors.

To sum up, although short-term debt funds are less risky than other fund types, they still have certain risks. Therefore, when choosing a short-term debt fund, we need to pay attention to important information such as the position of the fund, the experience of the management team and the reputation of the fund company, and invest according to our own risk tolerance.

Risk analysis of short-term debt fund I: product nature

Short-term debt funds and money funds are both fund products. In addition to capital preservation funds, fund products are not capital preservation, and the net value changes every day, as are short-term debt funds. Short-term debt funds themselves belong to bond funds, and 80% of fund assets should be invested in bonds, while money funds mainly invest in deposits, certificates of deposit and other varieties with good liquidity, so the risk of short-term debt funds is higher.

Risk analysis of short-term debt fund II: investment scope

80% of the fund assets of short-term debt funds should be invested in bonds, and the limit on the remaining term of bonds is looser than that of money funds. The longer the bond term, the higher the expected return and the greater the risk. Therefore, from the perspective of investment scope, the risk of short-term debt fund is slightly higher than that of money fund, which belongs to medium and low risk.

Risk Analysis of Short-term Debt Fund III: Historical Performance

According to statistics, there are about 19 short-term debt funds in the market at present. Judging from the historical performance of this 19 short-term debt fund, the net value of the fund has not retreated much, the net value fluctuates slightly, and the expected return is relatively stable. Judging from the historical performance of short-term debt funds, its risks are relatively controllable.

Are short-term debt funds risky?

Short-term debt funds are less risky, slightly higher than money funds, but lower than other bond funds. From the perspective of income, the income of short-term debt funds is also slightly higher than that of money funds.

The risk of a fund is determined by its underlying assets. The investment scope of short-term debt funds is limited to short-term bonds, central bank bills and other fixed-income varieties and bank deposits, and does not invest in stocks and convertible bonds. Short-term bonds refer to bonds with short investment period (within one year).

As far as the investment market is concerned, short-term debt funds mainly invest in the inter-bank bond market, which is less risky than the exchange bond market.

As a bond fund, short-term debt funds naturally face credit risk and interest rate risk. The credit risk of short-term debt funds is smaller than other bonds, but the sharp fluctuation of market interest rate in the short term will also have a certain impact on the net value of short-term debt funds.

Are short-term and medium-term debt funds risky?

Short-and medium-term debt funds are not risky. These funds are mainly invested in short-and medium-term bonds, which tend to be relatively low-risk, unlike equity assets or stocks, which are greatly affected by market fluctuations. On the one hand, the risk of bonds themselves is relatively small, and bonds generally repay the principal and interest at maturity, especially national debt, which is endorsed by national credit; On the other hand, short-term and medium-term debt funds invest in bonds with relatively short maturities. The shorter the holding period, the lower the possibility of credit risk, and the flexibility of short-term and medium-term debt funds is relatively good, so investors can withdraw them at any time when they have urgent capital needs.

Of course, the short-term and medium-term debt base still has certain risks. The risk of such funds is higher than that of money funds, but far lower than that of equity funds or hybrid funds. The risks of short-term and medium-term debt funds are mainly reflected in interest rate risk, credit risk, early sleep risk, inflation and other risks, as follows:

1 interest rate risk: when the market interest rate rises, most bond prices will fall; When the market interest rate falls, the bond price will rise. The change of bond price will naturally cause the movement of fund income. In addition, the longer the maturity of bonds invested by short-and medium-term debt funds, the greater the impact of market interest rates on bond prices.

2 Credit risk: If the bond issuer fails to pay the principal and interest on time, the short-term and medium-term debt funds will also face relatively high credit risk. In addition, bonds also have ratings. If the credit rating of bonds declines, it will lead to the decline of bond prices and the net asset value of funds holding bonds will also decline.

3 Early redemption risk: When the market interest rate drops, bond issuers can repay high-interest bonds in advance by financing at a lower interest rate. Then, funds holding bonds redeemed in advance will not only be unable to obtain high interest income, but also face the risk of reinvestment.

4 inflation risk: bonds are also facing the risk of inflation, which will devour the purchasing power formed by fixed income.