Maximum retracement is a relative concept, which is the percentage of decline from the highest point to the lowest point. Let's calculate, in the example just now, the highest point of the fund's net value is 1.5 yuan, the lowest point is 1. 1 yuan, and the maximum loss is 1.5 minus 1+0 equals to 0.4 yuan; Then the maximum retracement is 0.4 yuan divided by the highest point 1.5 yuan, and the result is 26.6%, which means the maximum retracement is 26.6%. Let's compare two fund products. This is a picture of two funds. The net value of the first fund rose from 1 yuan to 1.5 yuan at most, and finally fell to 1. 1 yuan, with a return of 10% and a maximum withdrawal of 26%. The second fund rose from 1 yuan to 1.3 yuan at most, and finally fell back to 1. 1 yuan, earning 10%, but the biggest withdrawal rate was only 15%. So the income of the two funds is the same, but the risk control level of the second fund is better. Therefore, in daily life, if the income level is the same, then you should choose the product with better risk control level, that is, the product with smaller maximum withdrawal, because this indicates that the money you earn now may lose the most in the future.