However, there is a saying in the fund market that scale is the enemy of performance. With the expansion of the fund scale, the performance of the fund may decline, which is actually the indirect result of fund management.
Large-scale funds test the ability of fund managers. For fund managers, the larger the fund scale, the more difficult it is to manage the fund. In the face of large-scale funds, we should refer to the past performance of fund managers when considering them. If the scale of funds managed by fund managers has been relatively large, such as tens of billions of funds, the performance can remain relatively stable in the top places, which also shows that such fund managers are trustworthy in managing large-scale funds.
The scale of the fund is related to the strength of the fund company, and the operation of the fund is the result of the cooperation of the whole team of the fund company behind it. If it is a large fund company, the overall investment and research strength is very strong, and it can also provide a more solid backing for fund managers. It is more likely that powerful large fund companies will manage large-scale funds.
Affect the investment style of the fund. If the investment style of fund managers is large-cap blue-chip stocks with long-term stable returns, then the challenge of large-scale and stable funds is relatively small. If fund managers prefer small-cap growth style with high turnover rate, it is relatively difficult to manage large-scale funds.
When choosing a fund, the size of the fund is also a factor to be considered. The relatively small scale of the fund may mean that the direction of fund investment is relatively unpopular and it is more likely to face the risk of liquidation. If it is a fund with a scale of 200 million or even less than 654.38 billion, it must be carefully selected.