The more stable the income, the better. The income of money fund is closely related to the trend of national debt yield and the degree of market liquidity, with little fluctuation. For investors, it is best to cash it on a daily basis.
3. With the growth of age, money market funds become more and more popular. Old funds are generally mature, have certain investment experience and hold more high-yield varieties. It is a wise choice to choose a money fund with a long history and relatively stable performance.
Monetary fund is an open-end fund. According to the types of financial products invested by open-end funds, people divide open-end funds into four basic types: stock funds, hybrid funds, bond funds and monetary funds. The first two belong to the capital market, and the latter is the money market.
Monetary funds mainly invest in short-term financial products with high security, such as bonds, central bank bills and repurchase. , also known as "quasi-savings products". Their main features are "worry-free principal, convenient demand, regular income, daily income and monthly dividend".
Money funds only invest in the money market, such as short-term government bonds, repurchase, central bank bills, bank deposits, etc. And there is basically no risk. Its liquidity is second only to bank demand deposits, and its income is calculated every day. Generally, the one-month income is carried forward to the fund share, and the income is slightly higher than the one-year time deposit, and the interest is tax-free. The principal of the Monetary Fund is relatively safe, with an expected annual rate of return of 3.9%. It is suitable for liquid investment tools and a substitute for savings.
The main difference between money funds and other funds that invest in stocks is that the net asset value of each fund unit is fixed, which is usually 1 yuan per fund unit. 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, investors can own 100 fund shares if they invest 100 yuan. 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.
The standard to measure the performance of money funds is the rate of return, which is different from other funds that make profits by increasing their net assets.
Monetary funds have good liquidity and high capital security. These characteristics are mainly due to the fact that the money market is a low-risk and high-liquidity market. At the same time, investors can transfer fund shares at any time as needed, regardless of the date.
The risk of money fund is low. The maturity of money market instruments is usually very short, and the average maturity of money fund portfolio is usually 4~6 months, so the risk is low, and its price is usually only affected by market interest rate.
The investment cost is low. Money funds usually don't charge redemption fees and have low management fees. The annual management fee of the money fund is about 0.25%~ 1% of the fund's net asset value, which is lower than the traditional annual management fee 1%~2.5%.