With the investment market becoming more and more complex and diversified, there are more and more factors to consider when choosing a fund, among which the maximum withdrawal rate is an important indicator to pay attention to when choosing a fund. What does it mean that the maximum withdrawal rate of funds is negative? Let me answer some questions for you today.

1. What is the maximum withdrawal rate of the fund?

The maximum withdrawal rate is a risk indicator, which is specially used to describe the worst situation that may occur after purchasing a product. Refers to the maximum expected rate of return on product net worth during the selected period.

For example, when a fund was first established, its net value was 1. In the second year, the net value rose to 2, and the return was 100%. Many investors are very optimistic and buy when their net worth is 2. In this way, in the next period of time, the value of the fund will fall back. On the whole, the fund still has a return rate of 40%, which is not low. Especially the initial investors, but the investors who bought at the highest point 2 lost money instead. Here is the maximum withdrawal rate of the fund.

2. What does it mean that the maximum withdrawal rate of the fund is negative?

The formula for calculating the maximum withdrawal rate of funds is: maximum withdrawal rate = max (di-DJ)/di;

Where d is the net value of a certain day, I is a certain day, J is the day after I, Di is the net value of products on that day, and Dj is the net value of the day after Di.

The maximum withdrawal rate of the fund is negative. For investors, it means that the greater the withdrawal rate, the more the value of the fund falls. The more you buy at a higher price, the more likely you are to lose money.

What does it mean that the maximum withdrawal rate of the fund is negative? I hope it helps you. Warm reminder, financial management is risky and investment needs to be cautious.