As an investor, you should know that the higher the withdrawal rate, the greater the possibility of loss. By observing the historical withdrawal rate data of the fund, we can find the stability of the fund income level.
Look at the possibility of potential losses when investing, so making good use of this indicator can help us choose excellent funds and reduce fund risks.
What is the highest withdrawal rate of the fund?
The maximum withdrawal rate is a risk indicator, which is specially used to describe the worst situation that may occur after purchasing a product. Refers to the maximum expected rate of return on product net worth during the selected period.
For example, when the fund product was first established, the net value was 1. In the second year, the net value rose to 2 and earned a return of 100%. Many investors are optimistic and buy a lot when their net worth is 2. In this way, the value of the fund will fall back to 1.5 in the next period of time.
Overall, the fund still has a yield of 50%, which is not low. In particular, the initial investors gained 50% of the expected income, while the investors who bought at the highest point 2 lost 25%. The 25% here is the maximum withdrawal rate of the fund we are discussing today.
According to different standards, securities investment funds can be divided into different types:
(1) According to whether the fund unit can be increased or redeemed, it can be divided into open-end funds and closed-end funds. Open-end funds are not traded on the market (as the case may be), but are purchased and redeemed by banks, brokers and fund companies, and the fund scale is not fixed; Closed-end funds have a fixed duration and are generally listed and traded on the stock exchange. Investors buy and sell fund shares through the secondary market.
(2) According to different organizational forms, it can be divided into corporate funds and contractual funds. A fund is established by issuing fund shares to establish an investment fund company, which is usually called a corporate fund; The establishment of fund managers, fund custodians and investors through fund contracts is usually called contractual funds. China's securities investment funds are all contractual funds.
(3) According to different investment risks and returns, it can be divided into growth funds, income funds and balanced funds.
(4) According to different investment objects, it can be divided into stock funds, bond funds, money market funds and futures funds.
It is still uncertain which is the earliest hedge fund. During the great bull market in the United States in the 1920s, there were countless such investment tools specifically for the rich. One of the most famous is the Graham-Newman Partnership Fund founded by Benjamin Graham and Jerry Newman.
In 2006, Warren Buffett declared in a letter to the American Museum of Finance that the Graham-Newman Partnership Fund in the 1920s was the earliest known hedge fund, but other funds may appear earlier.