Is the capital withdrawal rate high or low?
When choosing funds, historical performance has important reference value. We can roughly judge the profitability of the fund through its historical performance, but at the same time we can't ignore the fund's ability to resist risks. At this time, the withdrawal rate of the fund is a reference index to test the performance of the fund in dealing with market risks. This index reflects the ability of fund managers in investment management and risk control to some extent.
Fund retracement is the degree to which the net value of the fund decreases when the net value of the fund falls from the highest value to the lowest value in a certain period of time. Simply put, it is the extent of the decline in the net value of the fund. At present, retracement can be equated with decline, which is a normal fund market fluctuation process.
For a fund, the greater the decline, the more the principal shrinks, and the less the principal, the greater the increase needed to make up for the decline. So in theory, it is good to withdraw funds at a small cost. However, in the face of capital flight, we should treat it rationally. Although it reflects the possibility of fund losses to a certain extent, it does not completely mean that the less funds are returned, the better. For example, while the withdrawal of funds is relatively small, it may also mean that the investment operation of fund managers is relatively conservative, rather than representing higher investment, and our income at this time may be relatively low.
Therefore, judging whether a fund is worth holding depends not only on the withdrawal degree of the fund, but also on the market situation, investment target, investment strategy, investors' own risk tolerance and other factors.