Before we buy a fund, we often make a general judgment on the investment style of the fund, but later we sometimes find that the style of the fund will be biased, so what is going on? Let's get to know each other.

Reasons for the drift of fund style

Style drift refers to the phenomenon that the actual investment style of the fund deviates from the investment style declared in the fund prospectus during a specific investigation period, such as drifting from a low-risk hybrid fund to a high-risk stock fund, or changing industries. There are mainly the following reasons for the deviation of fund style.

1 change fund managers: every fund manager has his own investment habits, and the rotation of fund managers is more likely to lead to changes in investment style.

2 Discover a new track: The market is constantly changing. If the fund manager finds a better investment direction, he will invest to get more returns. Most investors are very concerned about the short-term performance of funds. In order to adapt to the market, fund managers will also chase market hotspots to improve short-term performance.

In fact, the subtle change of fund style is sometimes not a bad thing, and there is not much problem within the scope allowed by the fund contract, but the large-scale style drift shows that it is not rigorous to some extent.

At present, there are special tools on the market to analyze the style of funds. For example, there will be evaluations of fund styles on various fund sales platforms. For example, based on the market value of the stock held by the fund, the scale style of the stock invested by the fund is defined as large, medium and small; Then, according to the value and growth characteristics of the stock held by the fund, the style of fund investment in stocks is defined as value type, balance type and growth type.

If we buy a fund because we are optimistic about the style and theme of a fund, but after holding it for a period of time, we find that the style of the fund has changed a lot, then we can appropriately reduce the positions of some funds at this time. However, if the fund is selected through various indicators, and the fund itself has not undergone such a major change as replacing a fund manager with a completely different investment concept, then the temporary style adjustment may be that the fund manager temporarily changes the investment strategy in pursuit of higher returns according to market conditions. We can decide whether to adjust the position according to the later performance and the published quarterly and annual reports.