The characteristics of money market funds include:
1. Low risk: As money market funds mainly invest in short-term and high-credit money market instruments, their risks are lower than those of equity funds, bond funds and other investment products.
2. Stable income: The income of money market funds is usually higher than the bank deposit interest rate, and the fluctuation is small, which can provide investors with a relatively stable return on investment.
3. High liquidity: The liquidity of money market funds is usually high, and investors can purchase and redeem fund shares at any time, and the redemption funds usually arrive within 1-2 working days.
4. Tax exemption: In some countries and regions, the investment income of money market funds may enjoy tax incentives, further increasing the actual income of investors.
Investors of money market funds mainly include individual investors and institutional investors seeking stable income and low risk, such as pensions and trust funds. These investors hope to maintain and increase the value of their assets by investing in money market funds, while reducing the risk of their portfolios.
It should be noted that although money market funds have low risks, they still have certain investment risks, such as interest rate risk and credit risk. Therefore, when investors invest in money market funds, they need to choose appropriate fund products and investment strategies according to their risk tolerance and investment objectives.