What is a fixed average investment?
The "moving average fixed investment strategy" we introduced (also known as moving average deviation method) is also a common fixed investment strategy for many fund sales platforms. The basic idea of this strategy is divided into three steps:
The first step: first determine the fund to invest in;
Step 2: Select the benchmark index that is consistent with the style of the fixed investment fund. For example, if you invest in large-cap value funds, you can choose the Shanghai and Shenzhen 300, and small-cap growth style funds can choose the GEM index;
Step 3: Compare the benchmark index with the long-term moving average (such as the 250-day or 500-day moving average) of the trading day before the fixed investment deduction date. If the index is above the moving average, reduce investment, otherwise increase investment.
Off-court or on-court?
Funds that use front-end fees for off-site fixed investment will pay the handling fee in proportion every month when they buy, which increases the cost of fixed investment. If you buy at the bank counter, the handling fee is 1.5%. If you buy in online banking, the handling fee is 60-20%. If you buy on the fund company's website, the handling fee is generally 40%. There is a redemption fee ranging from 0.25% to 0.5% at the time of redemption. The average import and export cost is about 1~ 1.5% when the OTC fixed investment fund is used.
There is no handling fee for the back-end fund when it is purchased every month, and there is no handling fee for holding it for the time specified by the fund company (3- 10 years) and redeeming it. Therefore, it is best to choose funds with back-end fees for off-site fixed investment, but not all funds have back-end fees. If the holding time can't meet the requirements of the fund company, there is still a big handling fee.
On-site transactions, the average brokerage fee is 2.5%, and some brokers can get a minimum discount of 1% (related to the amount of funds). Moreover, the threshold fee of 5 yuan can be cancelled, and the general import and export fee is five ten thousandths. The friction cost of over-the-counter transactions (for example, front-end fee-based funds) is 20-30 times that of on-site transactions (there is no stamp duty for on-site transactions of index funds).
On-site trading can save fees and improve the fixed investment income of the fund. If our fund fixed investment strategy still wants to match the valuation rotation strategy, it is basically difficult to realize off-exchange trading, and the friction cost of on-exchange trading is quite small, which is convenient for us to carry out rotation operation. When the index valuation of investment enters the overvalued area, we can gradually sell index funds and buy fixed-income products.