Master these skills to choose a fund without confusion.
Count the stars and look at the indicators, so it's easier to choose bases.
There are many different management companies in the same type of fund, how to choose and compare?
Follow Niuniu to take a look at the two basic tips to help you analyze this problem!
Secret 1: count the stars
Look at how many stars Morningstar has rated for the fund as one of the investment references. According to the risk-adjusted returns of the fund history, Morningstar evaluates the performance of similar funds and generally requires the fund to be established for at least three years.
In the same type of funds, the top 10% of the funds were rated as 5 stars; the next 22.5% were rated as 4 stars; the middle 35% were rated as 3 stars; then 22.5% were rated as 2 stars; and the last 10% were rated as 1 star.
If you want to learn more about Morningstar rating, you can also read:
Secret # 2: look at the indicators
In order to have more quantitative analysis of the fund, focus on the return, risk and investment performance-price ratio of the fund, there are many related indicators in the market.
Profitability indicators: annualized rate of return, α, the longest continuous rising cycle
Anti-risk ability index: maximum withdrawal, maximum withdrawal repair time, annualized standard deviation, β, R square
Investment performance-price ratio indicators: sharp ratio, Traineau ratio, Karma ratio, information ratio, Sotino ratio
Don't be intimidated by these terms. In fact, you don't have to have an in-depth understanding of the meaning of each indicator. Fu Tu already provides an intuitive way to view it.
Open Futu Niuniu > enter the details page of a fund > performance > Fund indicators, you can directly see the relative level of each index of the fund in the same type of fund. To learn about individual metrics, click "View details" on the right.
Morningstar rating and fund indicators are based on historical performance and help us select funds from a quantitative point of view, but we should pay attention to:
1. Past performance cannot predict the future and decisions cannot be made entirely on the basis of these data.
In addition to quantitative research, investment should also pay attention to qualitative research. The future performance of the fund may also be affected by the change of fund manager, the change of investment strategy, the change of investment portfolio and even the macro environment.
2. Morningstar rating is lagging behind.
The funds that participate in the rating are generally required to be established for more than three years, and many funds with excellent performance lose their "tickets" to compete for stars. Although there is no such basis in the list of high stars, it does not mean that it has no investment value.
3. It is reasonable to compare funds of the same type.
Just as basketball players and skaters have their own strengths and will not compete in the same field, different types of funds are not suitable to use the same star and index to compare. At present, the classification of funds adopts the classification standard of Morningstar (Morningstar Category).
The average and ranking are for reference only and do not constitute investment advice.
4. The update frequency of each index data is different at present.
A small number of indicators are updated monthly, while the rest are updated daily. You can click the update time to view under the interpretation of the fund index.
Finally, if you want to gain an in-depth understanding of the meaning of a single indicator, please continue with the follow-up courses.
