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What happens if you buy a fund just by looking at the ranking?

Release Time:2022-05-14 Topic:How is the ranking of Orient Securities? Reading:4 Navigation:Stock Liao information > Finance > Fund > What happens if you buy a fund just by looking at the ranking? phone-reading

According to the data of China Securities Investment Fund Industry Association, as of February 2021, the number of public funds in the whole market has reached 8,202.

   For ordinary Christians, they usually don’t spend too much time and energy on research. How do you choose funds?

   Xiaobian once heard from friends around him that when he first came into contact with fund investment, he opened the investment Wealth Management APP and watched the oncoming leaderboards and best-selling lists. It is dazzling, and the dazzling ranking data is very eye-catching.

   So he bought without thinking too much. As a result, the market style changed not long after, and the results in the first game were not satisfactory.

   This little story tells us that buying a fund only by looking at the ranking of performance is really not feasible!

   We can look at the actual data again. Take the partial stock hybrid fund from 2015 to 2019 as an example, select the top 10 funds each year, and count the Ranking for the following year.

  Data source: Wind, past performance of the fund is not indicative of future performance, there are risks in the market, investment should be cautious.

   It can be seen that funds with outstanding performance in the past may not be able to continue their performance. After 90%.

   From this point of view, The winning rate of buying funds based on the ranking is not high, and it is difficult to constitute a guarantee of future returns.

   There may be some old Christians who say that it is because the famous "4433 base selection method" is not used properly, namely:

Ranked in the top quarter of the same type of fund in the most recent 1-year return rate; ;

   Ranked in the top 1/3 of the same type of fund in the last 6 months;

   Ranked in the top 1/3 of the same type of fund in the last 3 months .

   But there are obvious drawbacks to this method:

   may select funds that have only performed well in the past year. If the performance of a fund in the past year is far better than that of other funds, it is likely that the rankings in the past one, two, three or even five years will be "averaged".

   may select funds that do not meet their risk appetite. Funds selected according to this method include stock, hybrid, bond and other funds. If investors buy indiscriminately, there may be an imbalance in the allocation.

   The screening method is too rigid and may miss high-quality bases. Even if a certain fund has excellent long-term performance, it may be "rejected" due to the rotation of the market style, and it has not been ranked in the top 1/3 in the past 3 months.

   As the saying goes, it is better to have no books than to believe in books.

The    ranking is a good objective indicator that can help us quickly evaluate the historical performance of the fund. When observing the ranking, we need to keep the following two points in mind:

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   1. Avoid "speculation" based on short-term rankings.

   A-share style switches and sector rotations are frequent, and it is difficult to assess whether the product has the potential of a blue-chip fund based on short-term rankings alone. Furthermore, when we look atWhen you start with a short-term bright ranking, you are likely to buy it in the second half of the market.

   2. The ranking only represents the historical performance of the fund. Do not select the fund based on the ranking.

  It is difficult to grasp the future without knowing the history, but the ranking is only one of the factors we refer to when selecting the base. On this basis, we also need to combine market conditions, fund companies , fund manager, fund size, investment objectives, product drawdown and other factors are considered comprehensively.

(Article source: GF Fund)

Reminder: Investment is risky, so choose carefully.

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