Money funds, wealth management funds and capital preservation funds are also considered in this respect.

Risk-free and capital preservation are two concepts, and risk-free does not necessarily guarantee capital preservation.

Because the money fund invests in the short-term money market and holds a large number of high-credit short-term bonds and bank agreement deposits, it is extremely safe. In the history of China Monetary Fund, only two funds lost money in a single day, but both of them were made up in two days. Therefore, from this perspective, the money fund is almost risk-free, but it is not a capital preservation.

Financial management fund is an upgraded version of monetary fund, and it can be roughly considered that the risk levels of these two funds are the same.

Monetary funds and wealth management funds currently earn an annualized income of 4%-4.5%.

The capital preservation in the legal sense is the capital preservation fund, and the assets of the fund are guaranteed by the asset guarantee company.

This kind of fund needs the holder to hold it for a full capital preservation period before it can be guaranteed. The capital preservation period of capital preservation funds in China is generally 2-3 years.

Therefore, the capital preservation fund is almost always subscribed during its issuance period.

See figure:

(Source: ICBC Credit Suisse Bank Fund Management Co., Ltd. official website)

The above picture shows the capital preservation clause of ICBC Capital Protection No.3. From the clause, we can know that the capital preservation fund needs to hold the full insurance period before it can be guaranteed.

Because the capital preservation fund can invest in bonds and the stock market, the final income of this fund depends largely on the stock market performance in these two to three years. If the stock market is good, the foundation will have good returns, but if the stock market is not good, there will be some small gains, even if there is a loss at maturity.

The money fund has strong liquidity and extremely fast redemption speed. Now they can be received in real time.

Under the impression of capital preservation clause, capital preservation funds are generally held at maturity, so the liquidity is very low, which is suitable for the situation that a sum of money is not used for a long time. If you redeem it halfway, you generally need to wait for the opening hours and can't redeem it at any time. Therefore, if you invest in a safe fund, you should consider whether the money on hand will be used in the short term and choose the fund according to your own situation.