However, we can choose the pool of funds through some criteria in order to allocate appropriate funds. When choosing a fund, we should first consider the following questions:
First, understand the performance of the fund.
Although the historical performance cannot represent the future income, the historical performance of the fund is still one of our most important reference standards.
In fact, the performance of funds can be compared and screened through a comprehensive fund platform like Tian Tian Fund. Including the rating of the reference fund. Investors are advised to choose products with 4 stars and above in the same category in the past three years and five years when purchasing funds.
Why three or five years? Because the short-term performance of the fund may fluctuate greatly and the short-term ranking changes greatly, investors are advised to pay attention to the long-term income, at least at the rate of return of more than one year.
For those funds with very high performance rankings, the source of performance may be concentrated in a certain sector or embarrassing stocks. However, if the fund manager does not adjust the position in time, perhaps the next market will not be very beneficial to the performance of this fund, and perhaps this fund has the risk of falling. Therefore, it is necessary to choose funds from a long-term perspective, rather than selecting products from short-term performance.
If a fund's annualized income can rank in the top 1/2, the top 1/3 is worthy of attention and tracking.
Second, consider the risk level of the fund.
The risk difference between funds is very large. On the issue of risk, different investors have different risk tolerance. In particular, investors with low risk tolerance should pay special attention to similar funds with low risk rating.
Regarding the risk of the fund, the standard deviation can be used to measure the fund, and the standard deviation refers to the range of net value fluctuation. The value of standard deviation can be viewed on most fund platforms.
Third, be familiar with the investment direction of the fund
In the market, Public Offering of Fund can invest in stocks, bonds, etc. Some fund managers like value stocks, while others like growth stocks. Some fund managers like big and famous listed companies, while others choose small-cap stocks. So we need to understand the fund manager's position preference from the position angle.
Need to pay attention to the position of fund managers in the portfolio. The second point also includes the industry configuration preference on the position, or the preference for individual stock selection. In addition, we can also see whether the investment style of the whole fund is relatively stable.
In order to understand the investment direction of the fund, we must pay attention to the periodic report of the fund.
Fourth, the fund manager.
Fund managers have a very important influence on the management and performance of the whole fund. Many times, the strategy of the fund manager will change after leaving the company, which makes the performance of the whole fund unstable. There are also new fund managers whose performance will be better after leaving.
In terms of fund managers, we usually look at whether the fund manager has a complete market cycle experience (the experience of managing a fund is about 3-5 years), as well as the investment style of the fund manager, the fund performance under management and so on.
Fifth, transaction cost comparison.
The transaction cost of the fund is also a part to be considered. Saving money is making money.
Generally speaking, the expenses of the fund include one-time expenses and annual operating expenses. One-time expenses include subscription fees and redemption fees, and annual operating expenses refer to management fees and custody fees. Generally speaking, investors should pay more attention to the cost of bond products or fixed income funds, because the cost is corrosive to long-term investment.
I hope the above contents are helpful to you.