What is Monetary Fund?
Money-fund is an open-end funds, according to open-end fund invested in financial products category, people will be open-end funds are divided into four basic types: namely, equity funds, hybrid funds, bond funds, currency funds, the first two categories are capital markets, the latter category is the money market. Money funds invest mainly in bonds, central bank bills, repurchase and other short-term financial security, a high variety, also known as "quasi-saving products", whose main characteristic is their "principal worry, demand convenience, regular income, each Diary returns, monthly dividends. "
Money funds compared with other funds has the following characteristics:
Monetary fund Monetary fund and other funds invested in stocks the most important difference is that the net asset value of fund units is fixed, usually 1 yuan per unit. Investing in the fund, investors can make use of reinvesting the proceeds, investment returns have continued to accumulate, increasing investor-owned shares in the fund. For example a 100-dollar investors in a particular currency funds, the fund can have 100 units, l years later, if the investment return is 8%, then the investors more than eight fund units, a total of 108 fund units, the value of 108 yuan. To measure the performance of money funds yield the criteria for good and bad, which is the net asset value of other funds to a different value-added profits. Money-fund liquidity, good capital, high security. These characteristics mainly due to the currency market is a low-risk, liquid markets. At the same time, investors may not be a date-restricted at any time according to need for transfer of Units. Low-risk money funds. Money market instruments are usually very short expiration date, money fund portfolio's average duration is generally 4 to 6 months, so low-risk, their prices are generally subject only to the impact of market interest rates, Investment and low cost. Money funds usually do not charge redemption fees, and its lower administrative costs, money-fund's annual management fee the fund net asset value of about 0.25% to 1%, lower than the traditional 1% annual fund management fee ~ 2.5%. Money funds are open-end funds. Money funds are generally regarded as risk-free or low-risk investment tools, suitable for short-term investments in interest-bearing capital to prepare for contingencies, especially in the high interest rates, inflation rate, the securities decline in liquidity, credibility is lowered, can from the loss of principal.
