This fund is a large category of funds, and it is increasingly favored by people in the volatile market. Because the operation of the capital preservation fund is to strive for higher returns on the premise of ensuring the principal is not lost, its operation is bound to be more stable. At present, domestic capital preservation funds are all hybrid funds. The capital preservation fund adopts a dynamic portfolio insurance technology (CPPI) to realize capital preservation, and invests most assets (insurance bottom line) in fixed-income securities to ensure that the principal can be recovered when the capital preservation expires; At the same time, a small part of the remaining funds (safety mat) will be invested in the stock market to obtain high returns in the stock market. If the stock market rises, the funds invested in the stock market calculated by CPPI will increase, thus increasing the investment income of the fund; On the contrary, when the stock market falls, the amount of funds invested in the stock market calculated by CPPI will decrease, and the fund will transfer some funds from the stock market to the bond market with less risk, thus avoiding the risk of stock market decline and ensuring that the total assets of the fund are not lower than the predetermined safety bottom line. The investment goal is to maximize the investment income on the premise of ensuring the safety of the principal.

Capital preservation fund originated from American life insurance industry in the mid-1980s. After more than 30 years of development, the capital preservation fund has been sought after by domestic and foreign investors. At present, there are more than 40 capital preservation funds in the domestic market, with a scale of more than 70 billion. The main reason why investors like capital preservation funds is that they have the income characteristics of "ensuring the safety of principal". So, how does the capital preservation fund achieve capital preservation?

First, the use of portfolio insurance strategy to achieve the purpose of maintaining and increasing the value of the fund.

Ordinary investors divide fund assets into capital preservation assets and income assets. Capital preservation assets are mainly invested in fixed-income varieties such as low-risk bonds, and income assets are mainly invested in equity assets such as stocks. Only when investors ensure that the income from investing in capital preservation assets such as bonds is greater than the possible loss from investing in income assets such as stocks can the fund achieve its capital preservation goal. The biggest loss that fund assets can bear is the "safety mat". Investors mediate the allocation of risky assets according to the "safety mat". In a bull market, they increase the proportion of stock investment, while in a bear market, they increase the proportion of fixed-income investments such as bonds. Under this premise, the fund manager's stock selection advantage will be brought into play, and the capital preservation fund can share the benefits brought by the rising market conditions to a certain extent on the premise of ensuring the principal preservation. Its characteristics of "both offensive and defensive" are in line with the psychology of most investors to avoid risks and pursue returns.

Second, the third party provides the principal security guarantee.

Although the quantitative strategy adopted by the capital preservation fund has the income characteristics of "not capping at the top and not losing at the bottom", the capital preservation fund also has the possibility of losing money. At present, domestic capital preservation funds are guaranteed by guarantee institutions (banks, insurance companies and large enterprises) that meet the qualification requirements and have legal effect. At present, the domestic capital preservation fund stipulates that investors can enjoy the capital preservation agreement by buying and holding it during the subscription period until the end of the guarantee period.

In short, the capital preservation fund is a fund with low risk and stable income. It is a good hedging product when the market is in a downturn. It has the function of maintaining and increasing value. In the long run, the income is obviously higher than the bank's regular savings, which has a good function of saving substitution. In the case of large market fluctuation or overall market downturn, the capital preservation fund provides a low-risk investment tool with appreciation potential for investors with low risk tolerance and long-term investment as the goal.

At present, the domestic A-share market is still in the stage of shock adjustment, and investors can pay moderate attention to the capital preservation fund. It is suggested that investors can focus on the capital preservation fund products issued by fund companies with good performance support, and rationally plan the allocation of family assets in combination with personal risk preferences.