However, there is a saying in the fund market that scale is the enemy of performance, which means that when the fund scale reaches a certain level, with the expansion of the fund scale, the performance of the fund may decline. In fact, this is also the indirect result of fund management. Therefore, the larger the scale of fund management, the greater the influence on fund managers. To manage large-scale funds, several factors need to be considered:
The first factor is the ability of the fund manager. For fund managers, the larger the fund scale, the more difficult it is to manage the fund, so it will also affect the performance of the fund. In the face of large-scale funds, we should refer to the past performance of fund managers when considering them. In a complete bull and bear market, if the scale of funds managed by fund managers has been relatively large, such as tens of billions of funds, the performance can still be relatively stable and maintained at the top.
The second factor is the strength of fund companies. The operation of the fund is not the business of the fund manager alone, but the result of the cooperation of the whole team behind the fund company. If it is a large fund company, the overall investment and research strength is very strong, and it can also provide a more solid backing for fund managers. Large fund companies have more historical experience in large fund management. The management of large-scale funds is not a battle for fund managers alone, and powerful large fund companies have a higher level.
The third factor, the investment style of the fund, the scale of the fund managed by the fund manager is not always the bigger the better, and it is also related to the investment style. If the fund manager's investment style is to hold large-cap blue-chip stocks by adhering to the strategy of long-term stable returns, then the challenge of large-scale and stable funds is relatively small. If fund managers prefer small-cap growth style with relatively high turnover rate, it is relatively difficult to manage large-scale funds.
If the fund manager can meet the above three factors at the same time, then the impact and challenge of large-scale fund management on the fund manager is relatively small.
When choosing a fund, although the size of the fund is not our main consideration, we should be cautious when choosing a fund with too small a scale. The relatively small scale of the fund may mean that the direction of fund investment is relatively unpopular and it is more likely to face the risk of liquidation. If it is a fund with a scale of 200 million or even less than 654.38 billion, it must be carefully selected.
Appropriate fund size is beneficial to fund managers. When measuring a fund, we can take into account the size of the fund managed by the fund manager.