A bit more of a retracement.

When buying a fund, we must first conduct a comprehensive analysis of the fund's situation. One of the indicators is called the maximum drawdown, which means the maximum amount the fund has fallen from its original high point. For example, if a fund has a maximum net value of 3.5 yuan, but has fluctuated recently and the lowest net value is 2.8 yuan, then its maximum drawdown is 3.5-2.8=0.7 yuan, and the maximum drawdown rate is 0.7÷3.5=20%.

Through the calculation method of this indicator, we can know that it is mainly suitable for judging how much we will lose in the worst case scenario of this fund. It is a risk control indicator.