For most Americans, the only financial investments they could participate in at that time were bank savings accounts, stocks and bonds with pitifully low interest rates.
When times are hard, people will naturally look for assets with good security and strong liquidity. However, many financial assets are either too risky, illiquid or have low returns, which cannot meet the financial needs of investors.
At that time, Ruth Bant, director of the cash management department and credit analyst of the world's largest pension fund teacher annuity insurance company, had a genius idea after a thorough investigation of the financial services industry: he founded a * * * mutual fund called "savings fund company" at 197 1. The assets of the Monetary Fund are mainly invested in short-term monetary instruments (generally within one year, with an average term of 120 days), such as treasury bonds, central bank bills, commercial bills, bank time deposit certificates, government short-term bonds, corporate bonds (with high credit rating), interbank deposits and other short-term securities.
In fact, the investment scope of these money market funds are all varieties 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. ) 1. principal security: most money market funds have the lowest risk among all kinds of funds, and money fund contracts generally do not guarantee the principal security, but in fact, due to the nature of funds, the loss of money fund principal 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 yield: 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. Their annual net rate of return can generally be compared with the one-year time deposit interest rate. The annual income is shown in the table below, which is higher than the income level of bank deposits in the same period. Moreover, money market funds can also 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.
In addition, general money market funds can also be converted with other open-end funds under the fund management company, which is efficient, flexible and low-cost. When the stock market is good, it can be converted into stock funds, and when the bond market is good, it can be converted into bond funds. When there are no good opportunities in the stock market and bond market, money market funds are a good haven for funds, and investors can seize various opportunities in the stock market, bond market and money market in time. According to the statistics of straight flush, as of June 4th, 208 monetary funds (classified separately), including short-term wealth management funds, have a considerable overall return rate, with the latest data of 3.45%. Compared with the deposit interest rate of 0.35%, the overall "yield" of the above money funds is almost ten times. Even compared with the one-year bank deposit interest rate of 3%, the overall "yield" of the money fund is obviously beyond. Considering the advantage of liquidity, the advantage of money fund in holiday financial management is very obvious.
The cargo base has multiple advantages.
Monetary fund is a rare financial management tool comparable to demand deposit in liquidity and flexibility. Can be purchased at any time, redeemed at any time, and can receive the redemption amount of 1 to 2 days. The investment threshold of money funds is generally 1000 yuan or even several hundred yuan, which is far lower than the wealth management products of banks. Don't worry, you can't buy it when it's sold out. Weekend holidays also have benefits, leaving no blank period of benefits, and every little makes a mickle, which invigorates the spare money in daily life and really changes people's concept that "you must accumulate a lot of money to invest in financial management".
However, all kinds of short-term financial management funds that were once very popular could not be redeemed before maturity, sacrificing liquidity, and the overall income level was not higher than that of money funds.
Three criteria for selecting goods base: long-term performance, steady manager and online sales T+0.
The criteria for screening money funds are mainly to see whether their long-term past performance is stable and whether their fund companies have strong fixed-income teams to support them. Secondly, we should choose a monetary fund with large assets, because as a cash management tool, monetary funds have to deal with frequent redemptions every day. The larger the scale, the smoother the impact of capital inflow and outflow, and the more stable the income. Finally, as the most important point, the liquidity of the money fund is also very important. Money market funds that can withdraw cash at any time (that is, T+0 service) have become investors' first choice. Investors will think about what kind of money fund to choose. Investors should try to choose a relatively large-scale monetary fund with excellent long-term performance to invest, because the larger the scale, the greater the operating space of the fund, which is more conducive to investment operation and can better control liquidity risks. Companies that are good at making money funds in the market include ICBC, Credit Suisse, Jianxin, Nanfang and Wanjia.
Remember one thing when choosing a money fund: don't just look at who has a higher income at a certain point, but choose one with a relatively stable rate of return.
Money fund investment skills
The money fund is an open-end fund, which invests in the money market, mainly investing in bonds, central bank bills, repurchase and other short-term financial products with high security, and the longest term cannot exceed 397 days. Money fund income is generally higher than the bank's time deposit interest rate, which can be redeemed at any time and confirmed by T+2. Therefore, the money fund is very suitable for units and individuals who pursue low risk, high liquidity and stable income.
When buying money funds, we should adhere to the principle of "buying old money without buying new money, buying high money without buying low money, and shorting without doing much".
First of all, when buying money funds, priority should be given to the old funds, because after a period of operation, the performance of the old funds has become clear, but it will take time to verify whether the newly issued money funds can achieve good performance.
At the same time, investors should try to choose the type of high-yield money fund with the highest annual return. However, it should also be remembered that the Monetary Fund is more suitable for managing current funds, short-term funds or temporary funds whose current use is difficult to determine. For the medium and long-term funds that have not been used for more than one year, we should choose financial products with higher returns such as treasury bonds, RMB financial management and bond funds.
There are only two ways for the Monetary Fund to announce the distribution of monetary fund income: "every ten thousand shares of income" and "seven-day annualized rate of return". "The income per 10,000 shares is 1.07302" means that the income per 10,000 money fund shares on that day can be 1.07302 yuan; "Seven-day annualized rate of return" refers to the rate of return converted from average income to one year, which is a parameter to examine the long-term profitability of a monetary fund. Monetary funds with higher "seven-day annualized rate of return" have relatively higher rates of return. However, it should be noted that this indicator has certain limitations: because if the income of a certain day is particularly high, the annualized income of seven days including this day will be raised, so it can only be used as a reference indicator for selecting products. It is important to look at the past historical performance and evaluation.
The net value of the money fund remains unchanged at 1 yuan, and the change of its income is reflected by the change of the fund share. Investors can get their own funds back by redeeming the fund share. The only way for the money fund to pay dividends is to "transfer dividends to investment", so the fund company will transfer the accumulated income to the money fund share every month and pay it directly to the investor's fund account. The redemption rate of the money fund is 0%, and there is no handling fee.
In addition, on holidays and weekends, the money fund will also make money. Therefore, in case of some long holidays, you can buy money funds two working days before the festival to get holiday income.
Monetary funds generally have the highest annual rate of return at the end of the month, the end of the season and the end of the year. Look at the scale
Funds of different sizes have different advantages and disadvantages. If the scale is small, the continuous entry of incremental funds will rapidly dilute the investment income of money funds in the environment of falling interest rates in the money market, while larger funds will not have such concerns. In the environment of rising interest rates in the money market, smaller foundations will turn around and their income will rise rapidly. Considering all factors, investors should choose a money fund with moderate scale and strong operational ability.
Second, look at the old and new.
With the growth of age, money market funds become more and more popular. Old funds are generally mature in operation, have certain investment experience and hold more high-yield varieties. It is a wise choice to choose a money fund with a long history and relatively stable performance.
Third, look at A and B.
At present, 40 of the 5 1 funds are classified funds, and 1 1 funds are classified funds. The main difference between the two is the investment threshold. Generally, the initial investment of A-level funds is 1000 yuan, while the initial investment of B-level funds is more than one million yuan. From the perspective of income, the B-level income is higher than the A-level, but the threshold is too high, so ordinary investors are still suitable to choose the A-level fund.
Look at the product line
When the stock market is bad, investors can use the money fund to avoid investment risks safely, and when the stock market investment opportunity comes, they can use the future fund conversion function to improve investment income. Therefore, it is recommended to choose fund company products with perfect product lines.
Investors should try to choose a relatively large-scale monetary fund with excellent long-term performance to invest, because the larger the scale, the greater the operating space of the fund, which is more conducive to investment operation and can better control liquidity risks. By the end of the first quarter of this year, the size of the four Taurus money funds, Harvest Money Fund, exceeded 654.38 billion yuan, 5.7 times the average size of the money funds, accounting for 7.6% of the total size of the money funds. It is not easy to be affected by large redemption applications, and it is a more suitable money fund to buy. The main difference between money funds and bond funds lies in the different investment objects.
Money fund is an open-end fund, while bond fund is a fund that specializes in investing in bonds, mainly treasury bonds, financial bonds and corporate bonds.
The income of the money fund is only higher than the interest rate of bank time deposits, but there is no interest tax. You can redeem it at any time, and generally you will receive the funds the next day after applying for redemption. These two products have their own advantages.
As the king of cash management, money fund has high security, high liquidity and stable income, which is similar to "quasi-savings" and always blooms the charm of investment. According to the data of Galaxy Securities Fund Research Center, as of July 29th, 20 1 1, the average income of 49 A-level monetary funds this year is 1.8354%. Among them, Harvest Money Market Fund, the fourth phase of Jinniu money fund, ranks in the forefront of money funds with a yield of 2.0639%, outperforming the average market income level. If converted into annualized rate of return, it also exceeds the current annual fixed income level of 3.5%.
Since July, some wealth management products with long agreed term have been unilaterally terminated by banks in advance, and the subscription and expiration time of wealth management products is usually long, which reduces the actual income level of investors. Recently, the regulatory authorities have restricted the financing trust products, which will also narrow the investment scope of the original short-term wealth management products, thereby reducing their income level.
Because the average term of assets allocated by the money fund is short, the assets of the fund can be accumulated in a very short time. Moreover, the funds due to be paid will soon be invested in short-term bonds, central bank bills, agreement deposits and other varieties with higher returns after raising interest rates, so as to quickly increase the income of the money fund; Therefore, for investors, money funds are suitable for phased allocation, with low risk and good returns.