Money market funds refer to funds that invest in short-term securities in the money market. The assets of the Fund are mainly invested in short-term monetary instruments, such as treasury bills, commercial paper, bank time deposit certificates, government short-term bonds, corporate bonds and other short-term securities. 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. For example, an investor who invests in a money market fund of 100 yuan can own 100 fund shares. After 1 year, if the return on investment is 8%, the investor will have 8 more fund shares, totaling 108, with a value of 108 yuan.
Equity funds also have the function and characteristics of financing in the international market. As far as the stock market is concerned, the degree of internationalization of its capital is lower than that of foreign exchange market and bond market. Generally speaking, the stocks of all countries are basically traded in their own markets, and stock investors can only invest in stocks listed in their own countries or stocks listed in a few foreign companies. In foreign countries, stock funds have broken through this restriction, and investors can invest in the stock markets of other countries or regions by purchasing stock funds, which has played a positive role in promoting the internationalization of the securities market. Judging from the current situation of overseas stock markets, a large part of the investment objects of equity funds are foreign company stocks. From the perspective of asset liquidity, equity funds have the characteristics of strong liquidity and high liquidity. Equity funds invest in stocks with excellent liquidity, with high asset quality and easy realization. Compared with investors' direct investment in the stock market, equity funds have the characteristics of risk diversification and low cost. For ordinary investors, individual capital is limited after all, and it is difficult to reduce investment risks by diversifying investment types. However, if you invest in stock funds, investors can not only share the benefits of all kinds of stocks, but also spread the risks among all kinds of stocks by investing in stock funds, which greatly reduces the investment risks.