Today, let's discuss, is there a difference between the fund's rate of return and the annualized rate of return? What is the difference?

Let's talk specifically about the relationship and difference between fund return rate and annualized return rate.

The calculation method of annualized rate of return is to convert the current rate of return (daily rate of return, weekly rate of return, monthly rate of return) into annual rate of return, which is a theoretical rate of return, not an actual rate of return. Annualized rate of return The annual rate of return converted from the net income per 10,000 fund shares of the Monetary Fund in the past seven days. There are two ways to carry forward money market funds:

1. "Dividends are paid daily and carried forward monthly", which is equivalent to one-day interest and compound interest every month; 2. "Daily dividends are carried forward daily", which is equivalent to daily compound interest.

The rate of return is easy to understand, that is, how much income is generated in different time periods. For example, a fund has increased by 5% in the past six months. The answer means that if you bought it six months ago, the income will be 5%. The annualized rate of return is to convert the current rate of return (daily rate of return, weekly rate of return, monthly rate of return) into annual rate of return, which is a theoretical rate of return, not an actual rate of return.

For example, a fund rose 1% in 30 days, and the annualized rate of return 12.87%. This annualized income can not be obtained by holding this fund 12 months, and it may be more or less. Like the 7-day annualized rate of return in the money fund, it is to replace the 30 days in the example with the last 7 days and get the 7-day annualized rate of return.

Fund, in English, refers to a certain amount of funds set up for a certain purpose. It mainly includes trust and investment funds, provident funds, insurance funds, retirement funds and funds of various foundations. From the accounting point of view, capital is a narrow concept, which refers to funds with specific purposes and uses. The fund we are talking about mainly refers to the securities investment fund.