What does the maximum withdrawal of funds mean?
The maximum retracement of the fund refers to the fluctuation range of retracement at any high point when the net value of the fund falls to the lowest value in the selected time period.
For example, in a month's time, the periodic high point of a fund's net worth is 2.5, and the lowest point is 2. 1, and the fluctuation from 2.5 to 2. 1 is the maximum range of the fund's fluctuation from high point to low point in this month, so the maximum withdrawal rate of this fund in this month is (2.5-2.1).
The greater the withdrawal of the fund, the greater the fluctuation of the fund's net value, which means that the risk control of the fund is worse. The smaller the maximum withdrawal amount of the fund, the stronger the risk control ability of the fund. If a fund can control the maximum retracement data well, it shows that the fund manager has a very keen judgment on the market and has the ability to regulate the fund position.
1. For fund share holders, the greater the withdrawal ratio, the more the net value of the fund falls, and the more serious the losses are, so the smaller the withdrawal ratio, the better.
2. For investors who have not bought, the bigger the retracement means the lower the net value, so the lower the buying cost, so the bigger the retracement, the better.
3. For investors with fixed investment funds, the bigger the retracement, the better, because the bigger the retracement, the lower the cost of buying when falling, the more shares they can get and the lower the total average cost.
However, when choosing a fund, you can't just choose according to the maximum withdrawal amount of the fund, because the maximum withdrawal amount can only explain the anti-risk ability, but not the profitability. When choosing a fund, we should also combine the fund manager's past performance, net worth, industry sector, Sharp ratio, standard deviation and so on.