Why not suggest buying a new fund?
Here are some reasons why buying a new fund is not recommended:
1, missing historical data.
The new fund lacks sufficient historical data, so it is difficult to evaluate its performance and risk level. Without enough data to measure the success or failure of the fund, it is difficult for investors to know whether the fund is suitable for their investment objectives and risk preferences.
2. High expense ratio
Usually, the management fee of new funds will be much higher than that of mature funds. This is because the new fund needs to pay more marketing costs (such as advertising) to attract investors. High expense ratio will reduce the fund's rate of return, thus affecting investors' long-term return.
3. There may be risks.
New funds usually face all kinds of uncertainties and risks, including market fluctuations, investment strategy mistakes, management changes and so on. In contrast, funds that have been in operation for several years have proved to be able to withstand market fluctuations and management challenges, so they are more favored by investors.
4. Unstable asset portfolio
New funds usually face the risk of portfolio instability. Because the good relationship with the market was not fully established in the early stage, it is difficult to establish a high-quality and diversified investment portfolio. This may also mean that the new fund may bear greater fluctuations or risks in the early stage of operation.
5. Lack of professional evaluation
Due to the lack of sufficient historical data, new funds often lack mature institutions to evaluate and analyze them professionally. This makes it difficult for investors to determine whether the fund is a good investment choice.
In short, although some investors may be attracted by new concepts and potential returns, buying new funds is not always a wise choice. New funds usually lack sufficient historical data and professional evaluation, and the expense ratio is relatively high, which may lead to risks and unstable portfolio. On the contrary, mature funds have stood the test of time and proved the effectiveness and reliability of their investment strategies, so they may be more suitable for investors' long-term investment plans.