Fund Investment Encyclopedia | How to Invest Funds in Hong Kong
What is a money market fund? How can you buy money market funds in Hong Kong?
What is a fund?
FundIt is an investment vehicle that pools funds from numerous investors and is managed by professional fund managers. Based on asset class, it includes money market funds, bond funds, equity funds, and more; depending on whether dividends are distributed, it can be further categorized into distribution funds and accumulation funds. Other types include ETFs (exchange-traded funds), trust funds, and private equity funds. Some of these carry higher risk, while others are relatively lower risk. You can choose based on your investment objectives and strategy to diversify and manage risk.
What is a money market fund?
Money market funds (MMFs) typically invest in short-term, fixed-income securities such as government bonds, corporate short-term bonds, bank deposits, and commercial paper. Their relatively low risk and high liquidity make them suitable for investors of all types, particularly those with a conservative investment profile.
Characteristics of Money Market Funds
The investment portfolio of a money market fund is primarily composed of low-risk financial instruments to safeguard the principal. These instruments typically carry high credit ratings and are issued by entities with strong debt-servicing capabilities.
Low volatility
The objective of money market funds is to maintain a stable net asset value, typically keeping the NAV per unit at RMB 1 or its equivalent in another currency, with only minimal fluctuations. This stability enables money market funds to preserve and enhance investors' capital while maintaining consistent value.
Lower risk
If you'd like to keep a portion of your capital on hand, waiting for investment opportunities; if you want that capital to hedge against inflation and even recoup the erosion of purchasing power over time—while still retaining the flexibility to deploy it elsewhere at any moment—money market funds may be one of your investment options.
Flexible and convenient
Money market funds typically have short investment horizons, usually ranging from a few months to one year. They also offer convenient fund management features, such as easy account opening and the ability to subscribe or redeem at any time, resulting in high liquidity. This allows you to manage your funds flexibly according to your needs.
Lower expected returns
Risk and return are generally proportional. Because money market funds carry relatively low investment risk, their expected returns are also comparatively modest.
Futu Cash Treasure: Daily Returns
Based on the 6P principle, Futu Elephant Wealth carefully selects investors based on performance, investment philosophy, portfolio, management team, management company, and investment process.Selecting High-Quality Money Market Funds, creating Futu Cash Treasure.
For as little as HK$0.01, you can invest in a money market fund and enjoy an average return of up to 3.8%*, offering stable, predictable yields that turn your spare cash into income. What's more, you can buy and sell on the same day, deploy funds whenever you like, and withdraw them at any time—so you never have to worry about your cash being locked up. This ensures you always have ample liquidity to cover your daily expenses.
*The average return of 3.8% is calculated as the average increase of all USD-denominated money market funds on the Futu platform that have been established for at least one year over the past year, with data as of February 7, 2026. Past performance is for reference only, and a fund's past performance does not indicate its future performance. Even if positive distribution income is recorded, it does not mean that positive returns can be achieved.
Mutual fund fees
Unlike trading stocks on your own, funds are managed by professional investment managers and therefore incur management fees and other charges. Consequently, before selecting a fund, you should not only evaluate its performance but also carefully consider the various fees associated with purchasing it; otherwise, you may end up earning returns only to lose money on fees, making the investment unprofitable. In most cases, fund fees and expenses are deducted directly from the fund's assets.
Fund Expense Category | Fee List | Definition |
|---|---|---|
Transaction fees | Subscription fee | Fees paid upon purchasing a fund (typically deducted from the investment amount and paid directly to the investment advisor or distributor). |
Conversion fee | The fee charged when an investment amount is transferred from one fund and reinvested in another fund managed by the same fund company. | |
Redemption fee | Fees paid upon the sale of a fund. | |
Ongoing fees (deducted from fund assets) | Management fee | Payment to the fund manager as compensation for providing fund management services. |
Custody fee | Payment to the custodian as compensation for the provision of custody services. | |
Performance Fee | Fees paid to the fund manager when the fund generates profits. | |
Administrative fee | Related expenses for fund administration and operations. |
How can I purchase money market funds in Hong Kong?
Buy funds on Futu. When you subscribe to funds on Futu, you can enjoy "zero fees": zero commission, zero platform fee, and exemption from subscription and redemption fees. The threshold for buying funds is as low as HKD/USD 0.01 per transaction. To buy funds on Futu, you first need two accounts: a securities account and a fund account:
How do I open a securities account?
Step 1: Go to the Futu official website and register a new account.(Register Now)
Step 2: Open a securities account based on your Futu account.(Open an account now)
Step 3: Deposit funds and fill in personal and financial details (includingBank code and account number), then deposit funds via bank transfer, debit card, or Apple/Google Pay.(Invest funds immediately)
How do I open a fund account?
If you need to open a separate fund account:
On the app, simply tap "Open Account" → "Fund Account Opening" to open only a fund account.
Note: Futu now supports opening a fund account first and then a securities account.
If you need to trade both stocks and funds:
On the app, tap "Open Account" → "Express Online Account Opening" → and when selecting your account type, simultaneously check both the securities account and the fund account to activate the corresponding accounts.
Once the account is successfully opened, you can start purchasing funds:
Select the fund you wish to purchase and go to its detail page.
Select the [Payment Account], enter the purchase amount, click [Buy] at the bottom of the page, and then confirm to complete the purchase.
Friendly Reminder: Regardless of how low-risk an investment product may be, we strongly recommend that you carefully review the relevant documentation before investing, thoroughly understand the detailed investment rules and risk disclosures, and seek professional advice when necessary. Investors should note that fund prices can both rise and fall and may experience significant short-term fluctuations; there is no guarantee that investors will be able to recover their entire investment. Past performance of a fund is not indicative of future results. Any forward-looking statements contained in this document should not be construed as a guarantee of future performance, and investors should be aware that actual circumstances or developments may differ materially from such statements.
