2. When investors buy money funds, fund companies will use the money to buy short-term money market tools. For example, buy short-term securities such as government bonds, central bank bills, commercial bills, bank time deposit certificates, short-term government bonds, corporate bonds (with high credit rating) and interbank deposits.
3. Buying bonds, central bank bills, bank certificates of deposit and other securities has interest, which is the income of the money fund.
First of all, money market funds usually have the following characteristics:
1. Low risk: because all the investments are securities with high short-term credit rating, the risk is relatively low.
2. High liquidity: the money fund can be paid in one or two days after redemption. Yu 'ebao is also a money fund and does not need to be redeemed, which is equivalent to redeeming the fund during consumption.
3. Low cost: Compared with other funds, the money fund has the least handling fee, no subscription and redemption fee, and low management fee and custody fee.
Second, the investment field.
1. The assets of the Monetary Fund are mainly invested in short-term monetary instruments (generally within one year, with an average maturity of 120 days), such as treasury bonds, central bank bills, commercial bills, bank deposit certificates, short-term treasury bonds, corporate bonds (with high credit rating), interbank deposits and other short-term marketable securities.
2. In fact, the investment scope of these money market funds is a variety with high safety factor and stable income. Therefore, for many enterprises and individuals who want to avoid the risks in the securities market, money market funds are a natural haven. Under normal circumstances, you can get higher income than the interest on bank deposits, but the money fund can't guarantee the safety of the principal. (But in fact, due to the nature of funds, money funds rarely lose their principal in reality. Generally speaking, money funds are regarded as cash equivalents. )
Third, product features
1. Principal security: Most money market funds have the lowest risk among all kinds of funds. Money fund contracts generally do not guarantee the security of the principal, but in fact, due to the nature of the fund, the loss of the principal of the money fund rarely occurs in reality. Generally speaking, money funds are regarded as cash equivalents.
2. Strong liquidity: liquidity can be comparable to demand deposits. The fund is easy to buy and sell, with short time to receive funds and high liquidity. Generally, the funds will arrive in a day or two after redemption. At present, some fund companies have opened the instant redemption business of money funds, which can be received on the same day.
3. Higher rate of return: Most money market funds generally have the income level of national debt investment. Money market funds can not only invest in investment tools that ordinary institutions can invest in, such as exchange repurchase, but also enter the inter-bank bond and repurchase market and the central bank bill market for investment. Its annual net rate of return can generally be compared with the one-year time deposit interest rate, which is higher than the income level of bank deposits in the same period. Moreover, money market funds can avoid hidden losses. When there is inflation, the real interest rate may be very low or even negative. Money market funds can keep abreast of interest rate changes and inflation trends and obtain stable and high returns.
4. Low investment cost: Generally speaking, there is no handling fee for buying and selling money market funds, and the subscription fee, subscription fee and redemption fee are all zero, so it is very convenient for funds to enter and exit, which not only reduces the investment cost, but also ensures liquidity. For the first subscription/subscription, 1000 yuan, and for the second subscription, 100 yuan will be increased.
5. Dividend exemption: Most money market funds always maintain the face value of 1 yuan. The income is calculated every day, and there is interest income every day. Investors enjoy compound interest, while bank deposits are only simple interest. Monthly dividends are carried forward as fund shares, and dividends are exempt from income tax.