We must understand the characteristics of the fund in order to do a good job. A decisive factor of fund characteristics is the proportion of asset allocation. The asset allocation ratio largely determines the risk of this fund.
Where can I see the asset allocation ratio? You can inquire from the fund prospectus published by the fund. There should be very few people who really pay attention. Let's take the fund of Guangfa Fund Company as an example to explain (I just randomly selected several funds of Guangfa as examples, which does not constitute investment advice).
Guangfa Lixin's flexible allocation and mixing: This fund is a mixed fund, and the proportion of the fund's investment portfolio is: the proportion of stock assets to capital assets is 0-95%, and the cash or government bonds with maturity within one year should be kept at least 5% of the fund's net asset value. Current asset allocation: shares, bonds, cash and other Guangfa resources are preferred shares; the Fund is a stock-based fund, and the investment portfolio ratio of the Fund is: the proportion of stock assets to fund assets is 80%-95%, among which the proportion of shares issued by listed companies investing in the resource industry is not less than 80%, and the proportion of government bonds within one year is not less than 5% of the self-examination net value of the Fund. Current asset allocation: stock cash and other high-end manufacturing stocks of Guangfa: the Fund is a stock fund, and the proportion of fund portfolio is: the proportion of stock assets to fund assets is 80%-95%, among which the proportion of stocks issued by listed companies investing in high-end manufacturing industries to non-cash fund assets is not less than 80%, and cash or government bonds with maturity within one year should be kept at not less than 5% of the fund's net asset value. Current asset allocation: stock and cash are mixed with steady growth: this fund is a mixed fund, and the investment principle is to allocate assets among stocks, bonds and cash. In order to reduce investment risk, the upper limit of stock investment is 65% and the lower limit is 30%. Allocation of current assets: stocks, bonds, cash, other cash and national debt are reserved to ensure the redemption of normal fund holders, generally not less than 5%, otherwise the fund will have to sell stocks to cash out, which greatly affects the investment income of the fund.
As a hybrid fund, the stock investment limit of Guangfa Lixin is 95%, that is, 95% of the shares can be retained at most, and the stable growth of Guangfa can only be maintained at 65% at most. In the bull market, fund managers will choose to allocate more stock shares to obtain higher returns, and Guangfa Lixin is more likely to obtain the gains from the bull market. Of course, when the bear market falls, if the market adjustment ratio is not judged in time, the risk will definitely be higher.
Let's look at two equity funds. They invest in different directions. If there is good news in the resources industry, the increase of preferred shares of Guangfa Resources will be even better. There are many good news about high-end manufacturing industry, and the shares of high-end manufacturing industry in Guangfa naturally rose better, and the risks brought by the spread of news are the same. If we put aside industry factors, let's look at the current asset allocation ratio of these two funds. In the current asset allocation of preferred shares of Guangfa Resources, stocks account for an obvious proportion in the current asset allocation of high-end manufacturing stocks of Guangfa, and the risk of the former will be higher.
The income and risk of different allocation funds are different. You can't compare it simply by income or fund type. Asset allocation is the core to determine the risk of a fund.