The maximum withdrawal of a fund is negative, which generally means that investors have lost money. For example, the net value of a fund drops from 1.2 to 1. 1, and the exit is negative. For investors, the greater the withdrawal rate, the more the value of the fund falls, and the more they buy at the high point, the greater the possibility of loss. Retreat is not terrible, what is important is whether the net worth can come back to life after retreat.

The maximum value of the rate of return when the net product value reaches the lowest point at any historical point in the selected period. Maximum retracement is used to describe the worst possible situation after purchasing a product. Maximum retracement is an important risk indicator, which is more important than volatility for hedge funds and quantitative strategy trading.

Extended data:

Exit is used to measure the anti-risk ability of private placement products. The meaning of retracement refers to the extent to which the net value of products falls from the highest point to the lowest point in a certain period of time. The maximum withdrawal rate is not necessarily (the highest net value-the lowest net value)/the highest net value, and may appear in a certain period of decline.

A fund product is measured by historical absolute income, and its initial subscribers may always make money by holding it, but investors who subscribe when private equity funds perform best may not necessarily make money, and may even suffer huge losses.

Generally speaking, paying attention to the maximum withdrawal rate of private equity funds can help investors understand the risk control ability of funds and know the biggest loss they face. Of course, while paying attention to the maximum withdrawal rate, we should also pay attention to the moving slope of the average net value of the fund.