The calculation formula is simple, that is, dividing two numbers. If the net value of the fund increases by 15% in a statistical interval, and the withdrawal from the highest point to the lowest point is commonly known as the maximum withdrawal of 20%, then its Calmar ratio is 0.75.
An Empirical Study on Callmar Ratio
Karma ratio indicates the ratio of the fund's rate of return to the maximum withdrawal in the fund stage, which can also be called the unit withdrawal rate. In fact, the calculation formula is very simple, that is, dividing two numbers. If the net value of the fund increases by 15% in a statistical interval, and the withdrawal from the highest point to the lowest point is commonly known as the maximum withdrawal of 20%, then its Calmar ratio is 0.75.
This ratio is very important, which reflects the investment ability and allocation level of fund managers. If we pursue long-term fund wealth management income, we should attach great importance to this index when choosing stock funds. Compare the two funds as follows.
1, E Fund's steady income, the meticulous work of Hu Jian, the star fund manager of E Fund, started management from 20 12, with annualized performance of1/0/.07%, with the maximum withdrawal of 6.36%, and Karl Marby 1.74, which is perfect data.
2. Investing in the stock fund managed by Du Meng, the star fund manager, invested in Morgan Emerging Power, with an annualized rate of return of 13%, but the retracement was huge, with a maximum retracement of 54% and a Karma ratio of only 0.25.
This example basically tells us that the Calmar ratio can show us many problems hidden in the rate of return but crucial to fund investment, which deserves our great attention. In the structural market of volatile market, it is not uncommon for funds to make money but lose money.
Relevant investment researchers of China Merchants Fund pointed out to reporters that it is often difficult for investors to resist the temptation of high returns when choosing funds, while ignoring the pain of high volatility and capital withdrawal. Investors should choose funds according to their own risk preferences by measuring the effective indicators of retracement. The investment researcher pointed out that the Callmar ratio, which has become increasingly popular in recent years, describes the relationship between return and maximum retracement. The higher the income, the smaller the retracement, the greater the value and the better the performance of the fund.
The Karma ratio measures the retracement of an asset's earnings in the past three years, which is why the Karma ratio is also called the retracement ratio. The higher the ratio, the better the return performance of the asset in an investment period. Like sortino ratio, Callmar ratio measures the downside risk of asset prices, but unlike sortino ratio, sortino ratio measures the downside risk of asset prices with downside volatility, while Callmar ratio uses the maximum retracement range of asset prices.