In the financial market, we often hear the concepts of 7-day annualization and 30-day annualization. Seven-day annualization means that the fund company takes seven days as a cycle and calculates according to the daily annualized rate of return, while the 30-day annualization is calculated according to the average rate of return of the past 30 natural days. Although both of them are used to calculate the return rate of funds, the results are quite different due to different calculation methods. So, how to transform the seven-day annualization and the thirty-day annualization into each other?

First, the difference between 7-day annualization and 30-day annualization

The calculation methods of 7-day annualization and 30-day annualization are different, which also leads to their differences. Seven-day annualized rate of return is calculated by adding the daily annualized rate of return in a seven-day period, that is, (the annualized rate of return is 1+ and the annualized rate of return is 2+? +annualized rate of return 7)÷7. The 30-day annualization is calculated according to the average rate of return of 30 natural days, that is, (the daily rate of return of the past 30 natural days is 1+ 2+? +Daily rate of return 30)÷30×365.

The calculation methods of 7-day annualization and 30-day annualization are different, so the results are quite different. The 7-day annualized rate of return changes rapidly, while the 30-day annualized rate of return is relatively stable. This also determines that in practice, investors need to choose which annualized rate of return to use according to their own needs.

Second, the conversion method of 7-day annualization and 30-day annualization

1, from 7 days to 30 days.

The conversion from 7-day annualization to 30-day annualization refers to the conversion from 7-day annualization to 30-day annualization, that is, 30-day annualization is calculated according to the annualized rate of return of 7-day cycle. The conversion formula is: 30-day annualized rate of return =( 1+ 7-day annualized rate of return) (365 ÷ 7)- 1.

Taking a fund's 7-day annualized rate of return of 4.2% as an example, the 30-day annualized rate of return of the fund can be obtained by substituting the above conversion formula.

2. Transform from 30-day annualization to 7-day annualization.

The conversion from 30-day annualization to 7-day annualization refers to calculating a 7-day weekly rate of return based on the average rate of return of the past 30 natural days, that is, converting 30-day annualization into 7-day annualization. The conversion formula is: 7-day annualized rate of return =( 1+30-day annualized rate of return) (7 ÷ 365)- 1.

Taking a fund's 30-day annualized rate of return as an example, substituting the above conversion formula, we can get the fund's 7-day annualized rate of return as 1.53%.

The choice of three days, seven days and thirty days.

For investors, how to choose a seven-day life and a thirty-day life needs to be chosen according to their own needs. If the investor's investment cycle is short, then it is more appropriate to choose seven-day annualization; If the investment cycle is long, it is more stable to choose 30-day annualization. In addition, it should be noted that 7-day annualization and 30-day annualization are only indicators for calculating the rate of return, and other factors, such as the risk level and performance evaluation of the fund, need to be comprehensively considered in the actual investment income.

In short, there is a great difference between the calculation methods of 7-day annualization and 30-day annualization. How to transform each other requires different formulas according to the direction of transformation. In actual investment, we need to choose the appropriate annual rate of return according to our own needs in order to achieve the maximum investment benefit.