What does the annualized rate of return of funds mean?
The annualized rate of return is calculated by converting the current rate of return (daily rate of return, weekly rate of return and monthly rate of return) into annual rate of return, and the annual rate of return refers to the rate of return obtained by investing for one year. This is a theoretical rate of return, not an actual rate of return achieved. The seven-day annualized rate of return of the fund is the annual rate of return converted from net income per 10,000 fund shares in the past seven days.
How to calculate the annualized rate of return of funds?
The annualized rate of return of the fund = (income/principal)/(investment days /365 days) * 100%. Annualized rate of return is a theoretical analysis index that converts the current rate of return (such as daily, weekly and monthly) into annual rate of return.
What does the annualized rate of return of funds represent?
The annualized rate of return of the fund reflects the past performance of the fund and is an index to evaluate the historical performance. Obviously, it cannot be used as a reference for future investment, because past performance cannot be used as a reference for future performance. The annualized rate of return can intuitively see whether the account as a whole is profitable or unprofitable, and how much is earned or lost, but it cannot show the real investment ability.
The annualized rate of return is one of the important indicators for investors to choose funds, but this indicator is not reliable 100%, which means that buying some funds with high annualized rate of return does not mean that they can make so much money, or that they will definitely make money, just that such funds have a higher probability of making money.