What is a short-term debt fund?
Short-term debt fund is a kind of bond fund. Fund assets mainly invest in short-term or ultra-short-term bonds with high liquidity, mainly referring to fixed-income varieties such as bonds and central bank bills and bank deposits. Generally, stocks and convertible bonds are not invested, and the investment period is generally within one year.
Bonds refer to securities that are agreed to repay the principal and interest within a certain period of time and are traded in banks, exchanges and bank counter markets. Bonds can be divided into short-term bonds, medium-term bonds, long-term bonds and perpetual bonds according to different maturities. The term of short-term bonds is within 1 year, the term of medium-term bonds is within1-1year, and the term of long-term bonds is above1year.
Is there any risk?
Short-term debt funds are not risky.
Interest income of bonds is the main source of income for bondholders. When bonds are issued, their coupon rate and interest payment methods will be announced. After the bond is held, the issuer will repay the principal and interest. Except for value-added bonds and floating rate bills, the interest of other ordinary bonds is fixed during the bond duration, and the holder will calculate the interest every day, even on holidays.
According to the analysis of the relative investment value between different bond sectors, such as national debt and credit debt, the generic bond allocation strategy is determined and adjusted in time according to market changes, so as to select the allocation ratio of generic bonds that can match the target duration and obtain higher holding period income.
Therefore, there is little risk for the fund to invest in short-term bonds.