Speaking of currency funds, everyone should be familiar with them. So, how to choose a currency fund?
Scale and Context
When choosing money funds, in fact, medium-sized money funds tend to have higher returns.
The fund scale is too small, the bargaining power with banks is weak, and good interest rates cannot be obtained. And in order to deal with redemption, the proportion of cash held is relatively high, and the funds used for investment are relatively small, which will also reduce the income. The scale is too large, and there are not so many high-quality protocol deposits in the market.
On the other hand, when market interest rates fall, small-scale funds are prone to diluting their income, and when market interest rates rise, large-scale funds are difficult to turn around, and it is not easy to quickly switch investment targets, and income will rise more slowly. Therefore, a moderate-sized monetary fund should be selected, such as 5 billion to 50 billion.
At the same time, fund companies with banking backgrounds can also get better interest rates and have more resources in their hands.
Income
The rate of return of monetary funds is a very important reference indicator, mainly looking at the 7-day annualized rate of return and the income per 10,000 shares.
In addition to choosing the ones with high returns, you should also choose the ones with low volatility and stable trend. If the return on a certain day fluctuates greatly, it will affect the reliability of the 7-day annualized return. Therefore, it is necessary to combine the 7-day annualized volatility of the interval and the volatility of the 10,000-point return in the interval, generally looking at the past 1 year.
Date of Establishment
It is recommended to choose the old rather than the new.
Generally, funds that have been established for a long time are more mature in operation, have certain investment experience, and hold a variety of high-yield varieties, and can also observe long-term returns. Whether the newly issued money fund can achieve good performance will take time to verify.
In addition, the expected returns of newly issued currency funds will be very low in a short period of time, and they cannot be redeemed, so their flexibility will be limited. And with the time in the market getting longer and longer, the income will gradually stabilize.
Therefore, you should try to choose a currency fund that has been established for a period of time and has been established.
Investment Threshold
Currency funds are divided into A shares and B shares. The difference between the two is mainly the difference in the participation threshold. The starting point of subscription for A share is low, and most of the subscription starting point for B share is more than one million yuan.
From the perspective of expected income, the income of B share is higher than that of A share, but the threshold is also high. When investors choose currency funds, they must clearly see the investment threshold. Some funds have high returns, but they may not be suitable for them.
Rates
Although there are no subscription fees and redemption fees for currency funds, there are management fees, custody fees and sales and service fees. These fees will be accrued on a daily basis from the fund’s net asset value on the previous day, paid monthly, and deducted directly from the fund’s income. Therefore, the lower rate should be selected.
Holder Structure
Different from stock funds and mixed funds, currency funds must choose retail investors.
Retail investors generally don’t pay much attention to changes in market interest rates, while institutions will always keep an eye on market interest rates. When the money in the market is slightly tight, they will immediately redeem, resulting in losses and “runs“.
In the monetary funds, which are mainly retail investors, the financial strength of each person is generally small, and the redemption does not occur at the same time, so the liquidity and profitability are more guaranteed.
Whether the fund is a retail investor depends on its holder structure. If the total institutional holding ratio is less than 40%, preferably less than 20%, it is almost a retail type.
Arrival Time and Redemption Status
After the implementation of the new regulations on currency fund redemption, the upper limit of T+0 redemption limit has become 10,000, and if it exceeds 10,000, it will be credited on the second or third day. Each platform is different, and you should also pay attention to currency funds. Redemption arrival time.
