In addition, during the investment period, the fruit or a very small proportion of the principal is set on derivative financial instruments such as options to earn the market price difference. Therefore, the capital preservation fund aims to provide investment opportunities for small investors to protect their capital and participate in the ups and downs of the stock market.
Because the capital preservation fund is a combination, whether it is a fixed-income commodity or an option investment, there is a certain period. Therefore, unlike the sustainable operation of general funds, most capital preservation funds have a duration when they are issued, so as to avoid frequent redemption by customers and affect the operating costs and performance of the funds. At present, the operation time of principal guaranteed fund design is mostly about two to three years.
In addition, the principal repayment guarantee provided by the capital preservation fund, only when the fund expires, if the investor cancels the contract and redeems in advance, will not only be unable to enjoy the capital preservation guarantee, but usually have to bear the redemption fee. However, at present, most of the newly issued capital preservation funds have regular redemption mechanisms. The most common way is to open redemption quarterly or monthly, but early redemption still cannot enjoy the guarantee of returning the principal provided by the fund. Therefore, when considering the capital preservation fund, investors should make long-term and short-term capital planning in advance, and then choose the appropriate capital preservation fund. Monetary funds mainly invest in short-term financial products with high security, such as bonds, central bank bills and repurchase. , also known as "quasi-savings products". Their main features are "worry-free principal, convenient demand, regular income, daily income and monthly dividend". Money funds only invest in the money market, such as short-term government bonds, repurchase, central bank bills, bank deposits, etc. And there is basically no risk. Its liquidity is second only to bank demand deposits, and its income is calculated every day. Generally, the income is carried forward to the fund share within one month, and the income is similar to one-year time deposit, and the interest is tax-free. The main difference between money funds and other funds that invest in stocks is that the net asset value of each fund unit is fixed, which is usually 1 yuan per fund unit. In other words, when you buy it, it's a dollar face value. Money funds are usually regarded as risk-free or low-risk investment tools, which are suitable for short-term capital investment in emergencies to earn interest, especially in the case of high interest rate, high inflation rate, reduced liquidity of securities and reduced credibility, which can avoid the loss of principal.