Are bonds more profitable than money funds?
Yes, the expected return of bond funds is higher than that of money funds. Bond funds mainly invest in bonds, and the bond investment ratio is not less than 80% of the fund assets. Fund income is determined by the bonds invested, and bond income = bond interest rate+bond price, but bond funds may lose their principal.
Which is suitable for short-term holding, bond fund or money fund?
1. Money funds generally have no subscription and redemption fees and are highly liquid. They are suitable for short-term funds as cash management tools, so they are more suitable for short-term financial management. Moreover, because the expected rate of return of the money fund is too low, it is not recommended to hold heavy positions.
2. Most of the subscription and redemption of bond funds require certain handling fees, such as redemption fees and sales service fees. The longer the holding time, the lower the handling fee rate. Moreover, the expected return of short-term debt funds is short-term, and the effect of long-term holding is more prominent than that of money funds, so bond funds are more suitable for long-term holding.