Difference 1: The holding period is different.
Short-term debt fund is called an enhanced version of money fund, so we can see that short-term debt fund is more like a current wealth management product, which supports T+2 redemption and has no exact holding days. However, in order to ensure the expected return, it is usually necessary to hold it for 6- 12 months.
Long-term debt fund is an embarrassing product, because its investment cycle is relatively long, and it usually needs to be held for 1-2 years.
Difference 2: The expected rate of return is different.
The expected rate of return of short-term debt funds is higher than that of money fund products, and the net value grows steadily.
Long-term debt funds are more sensitive to interest rates because they need to be held for a long time. Once the bank raises interest rates, it will directly affect its expected rate of return. Therefore, the expected return of long-term debt funds is not necessarily higher than that of short-term debt funds.
Difference 3: Different risks.
The main feature of short-term debt funds is to invest in short-term bonds, so that the liquidity of funds is very strong and the risk of investment is relatively small.
Long-term debt funds are vulnerable to interest rate fluctuations because of their long holding period. Once a bond defaults or interest is adjusted, the risk of a long-term debt fund is greater than that of a short-term debt fund.
To sum up, the short-term debt fund will be called an enhanced version of the money fund because of its low risk, stable expected income and strong liquidity. Under the premise that the money market and stock market are depressed this year, the short-term debt fund is a product with good cost performance and expected return.