Can I buy a high net worth fund?
Yes, but not all high-net-worth funds can buy it. We often fall into a misunderstanding that the lower the net value of the fund, the higher the upside. Although funds are mostly stock funds, which are closely related to the stock market, we should know that the investment thinking of funds is different from that of stocks.
1 stock investment logic
Investing in stocks is equivalent to investing in the stocks of listed companies that issue stocks. We can calculate the approximate intrinsic value according to the business situation and future growth space of the enterprise. When the stock price is too high and deviates more from its intrinsic value, the future upside will be compressed, the possibility of further rise will be reduced, and the downside risk will be greater.
2 Fund investment logic
The net value of the fund reflects the net asset value of the fund, and there is no concept of intrinsic value. There are many kinds of net worth, the most common one is unit net worth.
Net value of fund unit = total net assets/fund share. Simply put, it is a fund, and how much is sold.
We divide a 100 yuan into 100 yuan and a 1 yuan; A piece of 100 yuan is divided into 20 pieces, each piece of 5 yuan.
The same is true for buying funds. The net value of the same fund can be 1 or 2, depending on how many copies you cut.
Therefore, it has entered a serious misunderstanding to decide whether to buy or not just by looking at the net worth level. It is important to pay attention to the future changes of the fund's net value. It is the investment ability of fund managers that determines the future changes in net worth.
3 decisive factor: fund manager
The fund manager buys a basket of stocks, and when some stocks rise to a certain height, the fund manager will sell them.
Selling represents the transfer of risk, and the profit will be added to the net value of the fund. Assets change from stocks to cash, and then buy other undervalued stocks, and so on.
Therefore, as long as the fund manager is strong enough, the net value of the fund will continue to rise, and there will be no mean regression like stocks.
The low net value of the fund does not mean that it has more investment value. Maybe it's just that the fund manager's ability is insufficient, the net value can't go up, or the fund share is too much. Fund dividends are actually a way to reduce net worth.
Therefore, when investing in a fund, it is suggested to focus on the historical performance of the fund, the investment style of the fund manager, the annual and quarterly reports of the fund, the market valuation, the maximum withdrawal amount and other factors for comprehensive judgment.