High returns and high risks are associated, so there is no fund with high returns and low risks. But in the case of equal returns, we can choose a fund with relatively low risk; In the case of equal risks, choose a fund with higher returns; Or in a certain period, the fund valuation is relatively low, the rebound space is large, and the downside space is small, and it can also achieve the alternation of high returns and low risks. We can filter by maximum withdrawal rate, Sharp ratio and fund valuation.

0 1 maximum withdrawal rate The maximum withdrawal rate refers to the withdrawal range of the fund's net value from the highest point to the lowest point in a certain interval. In other words, it is the maximum loss range that can occur when buying a fund in this interval. It is a risk index to measure the fund's ability to resist risks.

For example, if the highest net value of a fund 202 1 is 2 and the lowest net value is 1.5, then we can say that the maximum withdrawal rate of this fund 202 1 is (2- 1.5)÷2=25%.

Through the maximum withdrawal rate, we can know which funds have stronger anti-risk ability and which funds have weaker anti-risk ability.

Application Tip: When purchasing funds, choose the fund with the smaller maximum withdrawal rate among similar funds.

02 Sharp ratio Sharp ratio is a very classic indicator to measure risks and benefits, and its calculation formula is:

(Expected annualized return of portfolio-annualized risk-free interest rate) ÷ Standard deviation of annualized return of portfolio

It seems a bit complicated, but we can directly understand it as income-risk ratio: expected excess income per unit risk. For example, if the Sharp ratio of a fund is 3, it means that investors who buy this fund are expected to get 3 units of income for every 1 unit of risk.

As can be seen from the above, in theory, the greater the Sharp ratio, the better.

However, it should be noted that no matter what indicators are limited, the Sharp ratio is mainly used to measure similar funds, such as stock funds and bond funds, and cannot be used for comparison.

Application Tip: Choose a fund with a higher Sharp ratio among similar funds.

03 Fund Valuation From the encyclopedia, we can know that fund valuation refers to the process of "calculating and evaluating the value of fund assets and liabilities at fair prices to determine the net asset value and the net fund share value".

According to the historical situation of this fund, the historical percentile of P/B ratio PB and P/E ratio PE is used to judge whether it is overestimated or underestimated. When the PB/PE percentile is in the range of 20%-80%, it is a normal valuation, when it is below 20%, it is underestimated, and when it is above 80%, it is overvalued.

Generally speaking, low valuation funds have relatively small risks and more room for growth; The risk of overvaluation of funds is relatively high. But there is no absolute thing, and the valuations of different industries are different. For example, the bank index is always in an undervalued area. Although there is a lot of room for growth, it rarely rises.

Application Tip: Funds with low valuation have low risk and large income space, so funds with low valuation should be selected.

To sum up: there is no fund with low risk and high return, but we can find out the fund with equal risk but higher return or lower risk according to the maximum withdrawal rate, Sharp ratio and fund valuation. It should be noted that the capital market is constantly changing, and each index has its limitations. When using, we should also pay attention to prevent market risks.

Tips: The fund is risky, so the investment should be cautious.