Seven-day annualized rate of return refers to the data obtained after the annualized average income of the subject matter in the past seven days. At present, the seven-day annualized income is calculated by money funds and some net worth wealth management.
Seven-day annualized rate of return is the annual rate of return converted from the net income per 10,000 fund shares of the Monetary Fund in the past seven days.
The daily income of money funds will change constantly with the operation of fund managers and the fluctuation of money market interest rates. In fact, it is unlikely that the fund's income will remain unchanged for one year.
definition
Therefore, the seven-day annualized rate of return can only be regarded as a short-term indicator, which can roughly refer to the recent income level, but it cannot fully represent the actual annual income of this fund.
The average annualized rate of return of domestic money funds is about 3%, while the benchmark interest rate of one-year time deposits is 1.50%. As a cash management tool with excellent liquidity and safety, money fund is still an ideal substitute for short-term savings.
The establishment of this index is mainly to provide investors with more intuitive data for investors to refer to when comparing the income of money funds with other investment products. In this indicator, the rate of return in the last seven days is determined by seven variables, so the same rate of return in the last seven days does not mean that the net income per ten thousand fund shares in the seven days used for calculation is exactly the same.
Seven-day annualized rate of return is the annual rate of return converted from the net income per 10,000 fund shares of the Monetary Fund in the past seven days.
High and low index
There are usually two indicators to reflect the rate of return of money market funds: one is the 7-day annualized rate of return; The second is the income per 10,000 fund units.
As a short-term indicator, the 7-day annualized rate of return is only the information of the fund's income level in the past 7 days, and does not represent the future income level. What investors really care about is the second indicator, that is, the income per 10 thousand fund shares. The higher this indicator is, the higher the actual income investors get.
computing formula
Under different income carry-over methods, the calculation formula of seven-day annualized rate of return should also be different.
There are two ways to carry forward money market funds:
One is "monthly dividend, carried forward monthly" and the other is "daily dividend, carried forward daily".
Whether it is carried forward on a daily basis or on a monthly basis, it is equivalent to compound interest.
The formula of compound interest is: {[π (1+ri/10000)] (365/7)-1}×100% π means continuous multiplication i= 1. . . seven
Where Ri is the nearest i-th Gregorian calendar day (i= 1, 2? .. 7) Income per ten thousand.
The seven-day annual rate of return of the Fund is rounded to three decimal places.
The regulatory authorities in some countries have strict formulas for calculating the seven-day annualized interest rate: if the value of a monetary fund before the first day of trading is A, the value after the seventh day of trading is B, and the fee for these seven days is C (sometimes, for example, Yu 'ebao, according to the situation of 20 14/3/ 15, C=0).
The calculation formula of annualized income for seven days is (B-A-C)/A/7*365* 100%.