According to the new regulations, money market funds can choose "daily carry-over" and "monthly carry-over" at the same time. We can calculate and prove that there are differences between the results of "net income per ten thousand funds" and "7-day annualized rate of return" published by money market funds through two different carry-over methods.
1, the daily carry-forward rate is annualized geometrically, while the monthly carry-forward rate tends to be simply annualized, so the daily carry-forward rate is greater than the monthly carry-forward rate when the net income per 10,000 funds is the same;
2. With the same share and the same daily net increment, the net income per 10,000 funds calculated by monthly carry-over is greater than the net income per 10,000 funds calculated by daily carry-over. Accordingly, the change of net income per 10,000 funds calculated by daily carry-over and 7-day annualized rate of return is relatively gentle, while the two indicators calculated by monthly carry-over will be relatively stable in the middle of the month and may fluctuate greatly across months.
Remarks: The actual result is favorable for "monthly carry-over": in practice, although each fund adopts different carry-over methods, its share and income are also different, and the fund may take some actions to smooth the difference between the two methods, so the difference between the two methods is not as obvious as theoretically calculated.