First, policy risks. In recent years, the regulatory authorities have successively introduced many regulatory measures involving money funds, which have had a certain impact on the scale and income of the cargo base.
The second is interest rate risk. Interest rate is the cost of borrowing money. Monetary funds mainly lend money raised from the public to banks and other institutions to make money from them. If the cost of borrowing money is low, the yield of the money fund will naturally be affected.
Third, the risk of huge redemption. For monetary funds with a relatively high proportion of institutions, institutional funds are sensitive to market interest rates, and purchase and redemption operations are frequent, while a large amount of funds may lead to large redemption. At this time, if the market is not good, the fund company has to sell unexpired bonds in order to cope with redemption, resulting in a decline in income or loss.