1. Does the money fund have to protect its capital?
As a popular fund in the investment fund market, money fund has attracted much attention because of its high security and strong liquidity. As a fund with little risk in the fund market, should the money fund protect its capital?
Judging from the investment scope of the Monetary Fund, it is mainly cash deposits with a term of less than one year and short-term bills with high credit rating. Adopting domestic rating standards, the credit rating is the highest in the rating system of the same rating agency. Therefore, generally speaking, the assets invested by such funds are less risky and have little loss of principal, so they are considered as short-term safe havens for funds.
But under some extreme conditions, there will be some risks and losses. What is the specific situation?
2. What are the risks of investing in money funds?
1) market risk: generally speaking, the security of money funds is very high, and its market risk has little impact, but if the market goes down extremely (economic crisis, etc.). ), there will also be losses.
2) Operational risk: The operational risk mentioned here refers to some running risks, that is, if investors buy the money fund of a company with weak anti-risk ability or a big company suddenly has a big loophole (Lehman Brothers), the company will run away or go bankrupt, and there will be losses.
The above is about whether the money fund must protect its capital and what are the risks. I hope it helps you. Warm reminder, financial management is risky and investment needs to be cautious.