When Niuniu first had the desire to apply for funds, he first sprouted the idea of studying the fund recruitment letter, and sure enough. Niuniu's first time was strangled by the book of heaven with forty or fifty thousand words.
Fund recruitment letters that are more effective than melatonin, fund periodic reports full of technical terms, and obscure indicator data can be called an essential combination of insomnia. Niuniu painstakingly studied these three swordsmen and found out the income and risk assessment elements that investors are most concerned about. Niuniu will take everyone to break down one by one below.
01 Sleep-aiding artifact: fund recruitment letter
Digging up key information in a hundreds of pages of charter is like looking for a needle in a haystack. If you don't have time to savor the charm of language, then the following points will suffice.
Fund manager
在"just choose the right direction and focus on fund companies and managers."Niuniu repeatedly stressed the importance of selecting fund managers and research teams. You can find a detailed introduction to the fund company and the proposed fund manager in the recruitment letter, and you can also search for default records and historical performance levels through third-party platforms. After all, it is the direct manager of the funds, which deserves your more attention.
Investment scope
How do you know where the money has been invested? In fact, the scope of investment in the recruitment letter has been explained, and the investment strategy, objectives, related varieties and proportions are also clearly defined. Through this information, you can have a general understanding of the risks and returns of the fund.
Income and distribution
This part is directly related to your profits, and usually explains the income composition, distribution mode and distribution principle of the fund, among which the most noteworthy one is the income distribution principle, which stipulates that the fund isCash DividendOrDividend reinvestmentWhether to give money directly or profit directly is a question worthy of in-depth consideration.
Expenses
The charging method of the fund is much more complex than that of stocks, but each part of the fees are listed in detail in the recruitment documents, which are usually subscription / subscription fees, redemption fees, management fees, escrow fees and so on, which are also closely related to income.
Risk factors.
The prospectus also clearly describes the risks that the investment may face, and the basic people need to return to rationality and set psychological expectations and emergency measures for the potential risks. If the investment rookie does not have a keen judgment on the future policy and development trend, Niuniu suggests that you should read it several times and be careful.
02 Low achiever Crusher: periodic report of the Fund
In addition to the fund recruitment letter, the fund's official website also regularly publishes reports, including monthly or quarterly reports, semi-annual reports and annual reports. Take the monthly report of the Fund, for example, the thin pages carry an astonishing amount of information, professional terminology, obscure data, difficult charts. Niuniu os: the way of thinking of financial bosses is not close to the people at all.
However, the periodic reports of the fund usually play the role of disclosing key data and early warning of investment anomalies, and are important information for pre-investment analysis and post-investment management of the fund. So how to quickly find useful information from jumbled materials?
Performance of fund net worth
The growth index of fund net worth includes the growth rate of net value (performance in a certain period) and the growth rate of cumulative net value (performance since its establishment), which is a more objective index to evaluate the performance of the fund. it is usually used to reflect the income of the fund, and the higher the growth rate, the higher the rate of return of the fund.
(photo: Yi Fangda (Hong Kong) monthly dividend report on China stocks)
Some fund reports will also compare the returns of the fund and the performance benchmark for the same period, simply and roughly indicate whether the fund outperforms the market. If the fund you choose can't beat the benchmark for a long time, maybe you should consider whether this weak base still has investment value.
(photo: monthly report of PIMCO GIS income Fund in February)
Portfolio change
Regular reports usually disclose the asset allocation of the fund during this period, including the type and proportion of assets invested, the main positions, industry distribution and other information. We can judge the investment style and strategy of the fund according to the asset allocation and changes, so as to have a better grasp of its trend.
(photo: Yi Fangda (Hong Kong) monthly dividend report on China stocks)
Changes in the size of funds
If the scale of the fund is too large, it will encounter the problem of "ship disaster", which will reduce the liquidity of investment and improve the difficulty of management; while if the scale is too small, it may encounter the problem of survival, and it is easy to be "overturned" in the sea of capital. Therefore, we should pay close attention to the size of fund assets in regular announcements.
At the same time, if the fund share changes sharply in a short period of time, it means that there is a large-scale purchase and redemption, then it is necessary for the curious baby to go online to understand the reasons for the change and formulate investment strategies in a timely manner.
Change of fund manager
Nagging Niuniu has come online again, and if the fund manager changes, it means that the investment style and strategy of the fund may change greatly in the future, and seemingly small personnel changes may cause a big earthquake in earnings.
Of course, a mature citizen will not rely too much on data. after all, static indicators are difficult to measure the complex capital markets, and they should also be enthusiastic readers of regular reports to gradually improve their sensitivity to information in the course of follow-up.
03 Risk assessment artifact: five indicators with terrible names
If you are familiar with these two types of documents, you have beaten 60% of the people, but it is still a long way from a professional. The risk is so cunning and changeable that it can be countered by static words. If you want to monitor risks and returns at any time, you should be familiar with the following indicators-standard deviation, Sharp ratio, alpha, beta and R square. Don't run! Niuniu is not talking about advanced mathematics, nor does it provide a method of calculation (after all, we are all adults and it is not appropriate for us to be beaten by mathematics again). These data can usually be published on the fund's website or Morningstar website. Niuniu will focus on the reference value of these indicators.
(photo source: Morningstar)
Sharp ratio (Sharpe Ratio): a measure of whether funds can create "higher profits" with "smaller fluctuations".
When we choose funds, we should consider that funds with similar returns have as little risk as possible, while funds with the same level of risk have higher returns. Is there a tool for screening out ultra-cost-effective products? It seems that you already know the core of Sharp ratio.
The Sharp ratio is a comprehensive coefficient of return and risk, indicating how much excess return will be generated for each unit of risk. If the Sharpe ratio is positive, it means that the rate of return of the fund is higher than the volatility risk; if it is negative, the volatility risk of the fund is greater than the rate of return. Anyway,The higher the Sharp ratio, the better the fund's performance.
Standard deviation (Standard Deviation): a measure of the stability of fund volatility
Only to find a big disappointment after buying a recent star fund? You may have ignored the range of fluctuations, and you need to rely on the power of standard deviation. Simple understandingThe standard deviation is the change of the average range of rise and fall of the fund. the larger the number, the greater the degree of volatility, the smaller the stability, the higher the investment risk.
But the meaning of the standard deviation is to give you a psychological expectation of the potential volatility, which cannot be used to judge the quality of the fund. Those of you who have received the baptism of nine-year compulsory education should be able to understand that a sudden surge will increase the standard deviation.
Beta coefficient (β): a measure of the volatility of funds relative to the market as a whole
Beta coefficient is an overall volatility index which is used to measure the market risk (systemic risk) of the fund and reflects the change range of the fund return relative to the performance benchmark return.The higher the beta, the greater the volatility of the fund relative to the benchmark.Are you out of line? Then Niuniu, give me a chestnut.
Alpha coefficient (α): to what extent can the fund outperform the market?
The alpha coefficient is the difference between the actual return of the fund and the expected return calculated according to the beta coefficient. You can think of it as the "manager Buff coefficient". In active funds, it reflects the ability of fund managers to exceed the benchmark to some extent.The greater the α, the greater the ability of the fund to obtain excess returns and the greater the advantage of outperforming the market.
RSquare (R-squared): measure the correlation between funds and performance benchmarks
The beta coefficient is used to measure the volatility of the fund relative to the whole market. Whether it can effectively measure the market risk is largely affected by the correlation between the fund and the performance benchmark. In other words, if the fund is compared with an unrelated performance benchmark, the beta coefficient and the alpha coefficient calculated by it do not make any sense. The R square reflects the impact of changes in performance benchmarks on the performance of the fund.The higher the square value of R, the higher the correlation between fund performance and performance benchmark changes.
In addition, R square can also be used to determine the accuracy of beta coefficient or alpha coefficient.The higher the R square, the more accurate the two coefficients of the fund will be.
To a certain extent, the five indicators introduced by Niuniu can provide you with a reference for risk assessment, in which Alpha represents income, the bigger the better; the standard deviation and beta represent volatility, that is, short-term risk, and the smaller the value, the more stable the fund's performance; the Sharpe ratio is a combination of income and risk, and the greater the ratio, the higher the "cost performance".
But these indicators measure past data and cannot be used as accurate predictions of the future. At the same time, these indicators can only be compared in similar funds, and it is meaningless to compare the Sharpe ratio of a stock base with that of a debt base.
Conclusion
If you have broken the fund recruitment letter, the fund periodic report, the five indicators of these three musketeers, then congratulations that you have exceeded 80% of the base people. What? You said there was a feeling that Niuniu had been tricked into coming in: "didn't you say that several indicators were enough? as a result, you assigned a lot of homework!" "in the process of making beef, beef and chicken soup: fund investment seems simple, but in fact, there are many ways to invest, and it is very necessary to constantly strengthen the study of investment, just as it is all in order not to drag the country out of poverty, to keep your wallet strong and fat, and to turn yourself into an intellectual and attractive investor.
Edit / Aurora
Disclaimer
Risk and disclaimer: this document is not and should not be regarded as the basis for soliciting, soliciting, inviting, recommending the sale of any investment products or investment decisions, nor should it be interpreted as professional advice. Those who read this document or before making any investment decision should fully understand the risks and the characteristics and consequences of the relevant laws, taxes and accounting, and decide whether the investment is in line with their financial position and investment objectives according to their own circumstances, and whether it can withstand the relevant risks, and should seek appropriate professional advice if necessary.
Investment involves risks, and investors should carefully read the fund information and related documents (including its risk factors). Investors are advised to note that the prices of fund products can rise or fall, and may change substantially within a short period of time. Investors may not be able to get back the amount they have invested in the fund. The past performance of the fund does not predict future performance. If there are similar forward-looking statements in this document, such contents or statements shall not be regarded as guarantees of any future performance, and it should be noted that the actual situation or development may differ materially from such statements.
Those whose investment income is not in Hong Kong dollars or US dollars are subject to the risk of exchange rate fluctuations.