For example, the annualized rate of return of a money market fund is 2% on the same day. Assuming that the income of the money market fund in the next year remains the same as that of the previous seven days, you can get 2% of the overall income if you hold it for one year.
Extended data
Seven-day annualized rate of return is the sum of net income per 10,000 products in the past seven days, and then annualized. As an average index, the seven-day annualized rate of return can only reflect the approximate fluctuation of the past seven days. The short-term seven-day annualized rate of return of a product is extremely high, which may mean that the investment manager's operating style is more radical, and the daily income of users is often a bit like riding a roller coaster. For ordinary users, stable high income is king.
Of course, the daily income of money market funds will constantly change with the operation of fund managers and the fluctuation of money market interest rates, so it is unlikely that the fund income will remain unchanged for one year in actual operation. Therefore, the seven-day annualized rate of return can only be used as a short-term indicator and cannot represent the actual annual income of money market funds.
At present, there are two ways to carry forward money market funds, one is daily dividend, which is carried forward monthly, which is equivalent to daily simple interest, and the other is daily dividend, which is equivalent to daily compound interest. The formula for calculating simple interest is: (∑ ri/7) × 365/10000 ×100% compound interest is: .. 7), and the seven-day annual return rate of the fund is rounded to three decimal places.
This data belongs to the reference value. It can be seen that the 7-day annualized rate of return is calculated according to the 7-day income, if the 30-day annualized rate of return is calculated according to the latest 1 month income.
References:
Baidu Encyclopedia-7-day annualized rate of return