Capital preservation fund refers to a fund that provides a certain proportion of the principal invested by investors within a certain investment period. The capital preservation fund locks the risk of net value decline by using the operating structure design of the fund product itself, so that no matter how the market falls, the net value of the fund will not fall below the capital preservation target when it expires.
Of course, the vast majority of capital preservation funds only guarantee to subscribe for and hold the due share of funds, and do not guarantee the share of subscription or redemption after subscription.
Therefore, it is necessary to allocate some capital preservation funds in the portfolio for investors who have low risk preference and want to get better returns.
However, it should be noted that the capital preservation fund contract stipulates that most capital preservation funds cannot be guaranteed during the subscription period, and only the fund shares purchased during the subscription period can be guaranteed, which generally need to be held until maturity. Investors should choose a good purchase time window, and at the same time have a clear expected management of investment duration and liquidity.