In investors' cognition, the risk of equity funds is higher than that of hybrid funds, and the income is also higher than that of hybrid funds, including many so-called professionals. However, according to our statistics, among the top ten funds with accumulated income in recent 20 years, only one Baokang consumer product is a stock fund, ranking seventh, with accumulated income of 83.5%, while Great Wall, which ranked first in the same period, preferred accumulated income of 98.5%. Please see the picture below for details.
Top ten funds with accumulated income in recent 20 years
Does the conclusion subvert our inertial thinking? Why is there such a difference? Is it the ability of fund managers or the market situation? Do investors choose hybrid funds in long-term investment? Or a stock index fund? Let's talk about this phenomenon in detail.
What is a stock fund? Stock funds and hybrid funds are classified according to different investment objects.
Equity funds refer to funds that invest in the stock market, that is, the investment direction of fund assets is limited to the primary and secondary stock markets, and they do not participate in the transactions of bonds, currencies, commodities and extensions.
From the perspective of investment strategy, stock funds can be further subdivided into growth stock funds, value stock funds and balanced stock funds, mainly from the style of the stocks invested.
Among stock funds, index funds are often listed separately. Because index funds are passively managed, they are funds that simulate and track the rise and fall of all constituent stocks of an index. It is a collection of stocks. Index adjustment of constituent stocks, corresponding to the synchronous adjustment of funds. The rest of the time, almost no active trading adjustment.
What is a hybrid fund? Hybrid funds refer to financial products such as stocks, bonds, money markets and even various bills in fund portfolio allocation. The starting point of its product design is that investors only need to buy a fund to enjoy the wealth appreciation brought by the rise of various assets. Save trouble, worry and time, and you don't need to buy stocks, bonds or money market funds for investment.
Hybrid fund is neither a stock nor a complete bond, which is somewhere in between, and its risk is higher than that of money market fund and lower than that of stock fund, so the risk is moderate.
In hybrid funds, due to the different allocation ratios of stocks and bonds, the market usually further divides them into partial stock mixed base, partial debt mixed base and allocation mixed base. Obviously, literally, investors should know the difference between the three.
commingled funds
In short, the difference between hybrid funds and equity funds lies in the different proportion of stocks in the allocation, and the connection is that both of them will invest in stocks. When the stock market is in a bull market environment, the stock positions of some configuration hybrid funds are as high as 60% or more.
Why is the income of hybrid funds much higher than that of equity funds? Although they are both investing in stocks, the applicable rules and operation modes are completely different due to their different attributes. In the long run, these differences have officially led to a huge income gap.
1, position limit.
At present, according to the relevant regulations, the stock position of stock funds is roughly between 60% and 95%. In other words, stock funds must maintain at least 60% of stock positions at any time and cannot be short. China Securities Regulatory Commission is studying raising the minimum amount to 80%. Under extreme market conditions, such as the tight liquidity of 20 15 and the fuse of 20 16 at the beginning of the year, fund managers are supervised and can only watch their net worth keep hitting new lows.
Hybrid funds are much more flexible in positions, in which partial stocks account for more than 60%, partial debts account for more than 60%, and balanced funds account for about 50% respectively. The flexible allocation type is set to a general range, which is freely selected by the fund manager. For example, it is stipulated that the investment ratio of stocks can be 30%-90%.
2. Motivation to pursue fund ranking.
Although both hybrid funds and equity funds have the pressure and motivation to pursue rankings, the motivation of equity fund managers is more obvious and direct, while hybrid funds are not so strong because of the nature of their products. In the same market environment, it is difficult to stand out unless hybrid fund managers illegally over-allocate stocks. On the other hand, equity funds are different. Many fund managers use public offering funds as their springboard. As long as the relative returns are acceptable, they will put all their eggs in one basket. If you win the bet, you will become famous in World War I, and then leave your job to do private placement. On the contrary, they will only get less year-end bonuses. I foresee that many domestic private equity fund managers are still talking about their glory n years ago during the roadshow, and clearly perceive their pride from their expressions.
Fund investment core
3. Pursue absolute returns.
The benchmark of income comparison of hybrid funds is very different, and each company has its own set of standards, which makes the comparison between them unreliable and rarely compared. Equity funds have clear benchmarks, namely CSI 500, GEM index, SME index and CSI 300 quality. In this case, the whole equity fund is quite divided. Everyone compares with the benchmark, and everyone can't win the benchmark. The fluctuation of net worth can be said to be ups and downs. In the field of investment, we all know that the greater the fluctuation, the lower the long-term return.
4. Stock market reasons
10 years ago, the A-share market was 3,000 points, and today the A-share market is still 3,000 points. Although objectively speaking, the index has not changed, the quality of listed companies has improved, but the valuation and risk appetite have decreased. In contrast, the market has not risen, which also shows that the market is too volatile. Equity funds have been riding a roller coaster like an index, while hybrid funds can avoid the final ups and downs to some extent.
In short, the core difference between equity funds and hybrid funds is the position limit, which leads to the performance gap.
How to choose a hybrid fund for investment? Earlier, we talked about the difference between the two, and investors will obviously say, I know, now I want to know how to choose a hybrid fund. There are the following points for reference.
High probability capital preservation of hybrid funds
1. Choose a hybrid fund established for more than 5 years. At the same time, referring to the ratings of Morningstar Fund Network and Galaxy Fund Research Center, it is classified as a 5-star fund.
2. Fund managers are stable and rarely change, even if they change, it will take a long period. It is better for the fund manager of the selected target to remain unchanged and be held by the same person.
3. Choose a flexible mixed base. Only in this way can fund managers give full play to their professional abilities.
4. Finally, choose the old products issued by large fund companies.
To sum up, the nature of the product determines the level of income. When choosing a fund, investors must grasp what suits them and insist on holding it for a long time in order to obtain satisfactory returns.