At present, the channels for fund investment are very rich and convenient. At the same time, there are many types of funds, and the risks are different according to the types of funds. The risk of funds depends on the underlying assets they invest in. So what type of fund has the lowest risk?

What fund has the lowest risk?

The fund with the lowest risk is the money fund, and the assets invested by such funds are all money market instruments. The following explains the reasons:

1 What is a money market tool? Money market instruments mainly include short-term government bonds with a maturity of less than one year, large negotiable certificates of deposit, commercial paper, bank acceptance bills and repurchase agreements. Although these tools are famous, they are essentially borrowing money.

Who issues money market instruments? Generally speaking, it is the government, central bank and commercial banks that issue money market instruments. Investing in money funds is equivalent to lending money to the government, the central bank and commercial banks.

To sum up, since investing in money funds is essentially equivalent to the government, central bank and commercial banks, are you worried that they will not be able to pay back the money or not? The answer is not to worry, which is the fundamental reason for the security of the money fund.