The balance of a fund can be reflected in many aspects. How can we judge whether the investment style of a fund is balanced?
From the perspective of industry, balanced style funds generally have strong industry coverage and accommodate as many industries as possible.
From the perspective of style and market value, we can quantify each industry with P/E ratio, P/B ratio, expected growth rate of net profit, return on net assets, dividend yield and other indicators. Among them, the value style with low P/E ratio and high dividend yield is outstanding, the growth style with high net interest rate and high P/E ratio, and the quality style with high and stable net profit rate, while the balanced style has no obvious bias towards these three styles.
From the perspective of fund managers, the investment operation of fund managers also has obvious characteristics. We can use quantitative indicators such as position concentration, turnover rate and industry market value preference to describe the investment style of fund managers.
Generally speaking, a fund manager with a balanced style has a relatively moderate concentration of shares, a moderate dispersion of industry allocation and a relatively moderate or low turnover rate. When these three conditions are met at the same time, it can be judged that the investment style of the fund manager is balanced.
Whether the investment style of the fund is balanced will also be clearly stated in the basic information of the fund or the periodic report of the fund. However, in the actual investment process, it is normal for the investment style to deviate, so it is still necessary to judge whether a fund is balanced from the actual operation strategy.