Everyone has heard of etf when investing in funds. Etf is an open-end fund. So, is etf risky? What is the national debt etf? Today, Bian Xiao has prepared something about the risks of etf funds for your reference.
Is etf fund risky?
Etf fund is a high-risk fund investment, but the corresponding high risk will also bring high returns. Etf funds mainly track a specific index. When the stock market rises, the net value of the corresponding etf fund will increase. When the stock market falls, the net value of etf funds will also decrease. This shows that etf funds are linked to the stock market. For investors with average risk tolerance, it is not recommended to invest in etf funds.
There are two main risks of etf funds. One is the risk existing in the financial market itself, that is, system risk, which can also be understood as the risk of market ups and downs; The other is the risk of all open-end funds, such as liquidity risk of funds, failure of purchase and redemption, etc.
Based on the above, the risk of etf funds is relatively large. Before investing in etf funds, we must rationally evaluate individual risk tolerance and avoid unbearable economic losses.
Is etf fund risky? What is the risk of etf funds?
No matter what kind of investment, investors are most concerned about risk. So, are etf funds risky? How risky is it? Bian Xiao compiled the following contents. Let's take a look at the risks of etf funds!
Is etf fund risky? According to Bian Xiao, the risk of etf funds is lower than that of stocks, but higher than that of money funds, so the risk of etf funds is relatively large. The risks of etf funds mainly include the risk of fund net value fluctuation, the risk of tracking error between fund net value and underlying index, and the risk of trading discount premium. Details are as follows:
I. Risk of fund net value fluctuation:
Because etf funds aim at copying the underlying index, when the underlying index fluctuates due to various factors, the net value of etf funds will also fluctuate, which is very risky for investors to invest in etf funds.
Second, the risk of tracking error between the net fund value and the underlying index:
Due to the influence of management fees, dividends of constituent stocks and other factors, it is difficult for etf fund managers to completely copy the index performance, which is prone to tracking errors and risks. Investors should pay attention when buying etf funds.
Three. Risks of trading discount premium:
Due to the arbitrage mechanism of etf discount premium, under normal circumstances, the transaction price of etf funds will tend to be consistent with the net value. However, due to the influence of market supply and demand, the discount premium of etf funds may fluctuate greatly in a short time, which is risky.
Domestic etf funds have different risk levels according to the risk situation of the fund tracking target, which can be roughly divided into the following four risk levels:
1, low-risk etf products, mainly represented by money etf funds, are mainly affected by interest rate fluctuations in the money market. Generally speaking, the risk is very low and the income is very low, which is close to the bank 1 year time deposit interest rate.
2. The average long-term risk and expected rate of return of medium and low-risk etf funds represented by bond etf funds are lower than those of equity funds and hybrid funds, but higher than those of money market funds. The main risk comes from bond default, and the default risk of different grades of bonds is different, and the overall risk is controllable.
3. Medium and high-risk etf funds mainly include hybrid etf funds and index etf funds. The risks of these funds are generally linked to the fluctuation of the stock market, but they are not as big as stock funds in terms of position allocation and fluctuation range, and the risks are higher.
4. High-risk etf funds, mainly including stock etf funds and gold ETF. This kind of fund is the most risky, and the risk comes entirely from the fluctuation of asset prices.
What are the risks of buying ETF funds?
1, market fluctuation risk
The risk of market fluctuation caused by policy changes, interest rate adjustments and other factors is generally not considered by investors. Investors are advised to do a good job in market research when investing and observe market changes at any time. However, appropriate market volatility is conducive to investment.
2. Risk of tracking error
ETF funds mainly determine returns according to index changes. If the fund's net value deviates significantly from the index due to some factors, it may lose money. Therefore, investing in ETF foundation has the risk of making mistakes.
3. High purchase risk
Buying at a high level may lead to losses. When investing in ETF funds, investors are advised to make a valuation, and underestimating buying is more secure.
4. Economic risks
I often hear that "buying an index means buying national wealth". Investing in ETF funds is closely related to the national economic development. If the economy develops well, it is more likely to invest in funds.
Is the risk of fund fixed investment high?
The risk of fixed investment is not high, and any investment is risky. Fixed investment is an investment method of purchasing funds within a specified period of time, which is the abbreviation of fixed investment funds. It refers to investing a fixed amount in a designated open-end fund at a fixed time, similar to the bank's zero deposit and withdrawal method. Buying a certain fund product at the same time interval and the same amount is a way of managing money.
No matter what kind of fund you decide to invest in, investors must know the risks that the fund itself may face. For example, if you decide to invest in stock funds, you will face certain stock market risks. Therefore, investors need to have a good investment mentality and long-term planning when making fixed investment in funds.