there is no risk in the performance benchmark itself, but it is a measure. In the process of fund investment, regardless of income and ranking, in a certain period, the fund's rate of return is better than the performance benchmark, indicating that the product management operation is qualified, otherwise it is unqualified if it is lower than the performance benchmark. At the same time, performance comparison benchmark is also an important standard for investors to evaluate the performance of fund management companies.

for example, if the current performance benchmark is 8%, in the same type of fund investment companies, the companies with earnings above 8% are excellent fund companies in the second year or the next quarter, and those with earnings below 8% are poor fund companies, that is, 8% is regarded as a passing line.

the role of performance benchmark

1. Important indicators for judging management level

In the process of fund investment, regardless of absolute return and ranking, in a certain period, the fund's return rate is better than the performance benchmark, indicating that the management operation of the product is qualified; If the fund's rate of return is lower than the performance benchmark, it is unqualified.

2. Setting of "basic score line"

Different exams have different setting of passing score line. For example, if the score is 1, it is usually a passing line of 6; if it is 15, it is 9. The difference is that when taking a driver's license test, it is usually 1, and the passing score is 9. Similarly, the performance benchmarks of different types of funds are relatively different.

The performance benchmarks of bond funds and money funds are usually linked to the bond index or deposit interest rate. Take the current bond funds as an example, the performance benchmarks include China Bond Composite Bond Index, China Securities Credit Bond Index and China Securities Total Bond Index, and some are composite performance comparison benchmarks, such as the yield of China Bond Comprehensive Wealth (Total Value) Index × 9% one-year time deposit interest rate (after tax) ×1%.

3. Reveal the investment style of the fund

Funds that invest in small and medium-sized stocks usually use the small and medium-sized index as one of the components of the performance comparison benchmark. For example, a SSE ETF-linked fund has a corresponding performance comparison benchmark of "SSE mid-sized index yield ×95% deposit interest rate (after tax) × 5%"; Funds that invest in large-cap stocks are mostly based on the CSI 3.

4. Reflect the management ability of the team

Generally, it is not easy to judge the management ability of the team simply by whether the fund outperforms the market. The performance comparison benchmark can reflect the relationship between the fund and the corresponding system risks more accurately and objectively evaluate the ability of the fund management team.

5. Inquiry channel

In addition to using special inquiry tools, the performance comparison benchmark is one of the information disclosed by Public Offering of Fund. Investors can see what the performance comparison benchmark of the fund is in the prospectus, fund contract, etc. In the quarterly, semi-annual and annual reports of the fund, we can see the income of the performance benchmark and the net growth rate of the fund, and there is an intuitive comparison chart to show whether the fund outperforms the performance benchmark in the same period.