The main difference between money market funds and other funds that invest in stocks is that the net asset value of a fund unit is fixed, usually per fund unit 1 yuan. After investors invest in this fund, they can reinvest with the proceeds, and the investment income will accumulate continuously to increase the fund share owned by investors.
Extended data:
Money market funds usually do not charge redemption fees and have low management fees. The annual management fee of money market funds is about 0.25% ~ 1% of the fund's net asset value, which is lower than the traditional annual management fee 1% ~ 2.5%.
Money market funds are usually regarded as risk-free or low-risk investment tools, which are suitable for short-term capital investment to earn interest in case of emergency, especially in the case of high interest rate, high inflation rate, reduced liquidity of securities and reduced credibility, which can prevent the loss of principal.