Since the middle of this year, money market funds have disclosed the deviation between amortization cost method and "shadow pricing method" for two consecutive quarters. Judging from the situation in the last quarter, most funds have shown positive deviation, and many funds have shown considerable positive deviation; Individual funds also have some negative deviations. So what does this deviation mean? The greater the positive deviation, the better? According to the Notice on Money Market Fund Investment and Other Related Issues, when the absolute deviation between the net asset value determined by shadow pricing method and the net asset value calculated by amortized cost method reaches or exceeds 0.25%, the fund manager shall adjust the investment portfolio according to the needs of risk control, especially when the absolute deviation reaches or exceeds 0.5%, the fund manager shall prepare and disclose an interim report. In the quarterly report, money market funds will disclose the times when the absolute value of deviation is above 0.5%, the times when the absolute value of deviation is between 0.25% and 0.5%, the highest value of deviation, the lowest value of deviation and the simple average value of absolute value of deviation every working day.

On the one hand, this provision can narrow the gap between the net value calculated by the cost of the money fund and the actual net value calculated by the market price, so that the valuation of the money fund can go hand in hand with the market trend, and institutions can avoid using the gap between them to suddenly increase the rate of return; On the other hand, it can also avoid investor arbitrage and treat new and old holders fairly. The amortized cost method is a method to calculate the rate of return according to the cost, while the shadow pricing method is to calculate the fair rate of return of bonds with different maturities according to the price information of the market on that day, and use these fair rates of return to evaluate the fund portfolio. Because the market price fluctuates constantly, the rate of return obtained is different from that obtained by amortized cost method.