The maximum extraction rate refers to the maximum extraction range of yield at any historical point in the selected period when the net product value reaches the lowest point. Maximum retracement is used to describe the worst possible situation after purchasing a product. Maximum retracement is an important risk indicator, which is more important than volatility for hedge funds and quantitative strategy trading.

Extended data:

The maximum retracement mainly includes the following points:

1, retracement is used to measure the anti-risk ability of fund products. The meaning of retracement refers to the extent to which the net value of products falls from the highest point to the lowest point in a certain period of time. The maximum withdrawal rate is not necessarily (highest net value-lowest net value)/highest net value, but it may fall in one of the lots.

2. Retreat is used to describe the biggest loss that any investor may face. Fund products are measured by historical absolute returns. For its initial subscribers, it may be profitable to hold the fund all the time, but investors who subscribe at the best performance of private equity funds may not make money or even suffer huge losses.

Generally speaking, paying attention to the maximum withdrawal rate of private equity funds can help investors understand the maximum loss range they face and the fund's risk control ability. Of course, while paying attention to the maximum withdrawal rate, we should also pay attention to the moving slope of the average net value of the fund. This kind of fund fully embodies the law of high risk and high return of hedge fund wealth management products.

References:

Baidu Encyclopedia-Maximum Retreat Rate