The differences are as follows:

First, the definitions are different. Performance benchmark means that financial institutions evaluate the closed-end rate of return according to the past performance of a product, and then convert it into annualized rate of return. Seven-day annualization is the average income level of the monetary fund in the last seven days, and the data is obtained after annualization.

second, the evaluation time is different. The performance benchmark represents the past performance of a fund product, which can be long or short. Seven-day annualization only represents the average income level of seven days in history.

third, the level of reflection is different. The performance benchmark reflects the overall profitability of a fund product in the past, and the seven-day annualization only reflects the profitability of the product in the past seven days.

fourth, the evaluation scope is different. Performance benchmark can be used to evaluate financial products, while seven-day annualization can only be used to evaluate monetary funds.

the performance benchmark, like the seven-day annualized income, does not represent the actual income in the future, and the actual income needs to be based on the results announced by the fund company. The performance benchmark can refer to the annualized rate of return, which does not represent the actual income in the future. The final investment income needs to be based on the actual redemption value when the product expires.

Seven-day annualization is the average yield of the money fund in recent seven days. The change of performance benchmark will not change the investment scope of the fund, does not involve the change of the rights and obligations of the parties to the fund contract, has no substantial adverse impact on the interests of fund share holders, and does not need to convene a fund share holders' meeting.

which is better, performance benchmark or seven-day annualization?

I. Performance benchmark

After the implementation of the new asset management regulations, wealth management products are required to break the rigid redemption, and they no longer promise to protect the capital and expect the expected rate of return as customers. In the past, the "expected annualized expected rate of return" commonly used in wealth management products has the nature of expected rate of return commitment, so now the newly issued net worth products no longer use the concept of "expected annualized expected rate of return", but show performance benchmarks.

performance benchmark refers to the benchmark data of expected rate of return provided by the product issuer according to the past performance level of the product, which is similar to the passing line in the students' examination and is a passing goal set by the product operation. If the actual expected income of the product is higher than the performance benchmark, it shows that the product is operating properly and investors can enjoy the dividend.

although the performance benchmark doesn't have the function of promising expected return, it can actually be used as a reference for "expected annualized expected return". For example, if the performance benchmark of a product is 3.5%, it means that the historical performance of the product has reached 3.5%.

annualized expected rate of return on the second and seventh days

The annualized expected rate of return on the seventh day is the data obtained by selecting the actual average expected rate of return of the fund in the past seven days and converting it according to the annualization, which reflects the short-term performance of the fund products.

Like the performance benchmark, the 7-day annualized expected rate of return also has the function of expected return commitment, but it can be used as a reference data for the expected rate of return of the fund.

the performance benchmark generally evaluates the return rate of previous products in the whole closed period, which is converted into annualized expected return rate, while the seven-day annualized expected return rate only takes the expected return of the last seven days as the range, so it is slightly less representative. When selecting fund products, it can be extended from 7-day annualization to 3-day annualization or 6-day annualization, which can more accurately understand the historical performance of products.