"Investor Protection-Rules, Risk Recognition" Case XXI.

-- How to choose fund products

From what aspects can 1. investors choose their own fund products?

At present, there are a large number of fund products in the whole market, with more than 1000 stock funds, more than 3000 mixed products and more than 2000 bond fund products. Not only the number of fund products is large, but also the performance differentiation is very obvious. It becomes more and more difficult to choose. How to choose the right quality fund products? Can focus on the following aspects:

First, what is the scope of the fund's investment? Investors must carefully read the product's prospectus to understand its type and scope of investment. For example, the same bond funds, some can only invest in bonds, some can invest in stocks or convertible bonds; for equity funds, is the investment scope limited to domestic, or includes Hong Kong stocks and U.S. stocks and other markets? Products with different investment scopes have very different risk and return characteristics.

Second, how has the fund performed in the past? The primary goal of buying a fund is to achieve relatively excellent returns, historical performance is a relatively intuitive and convenient way to evaluate it, and investors should focus on its long-term and short-term returns and the ranking of similar products.

Third, how high is the past risk of the fund? To look back as completely as possible on the historical performance of the fund's products, observe how much the maximum retracement occurred in volatile or adverse market conditions, and how much volatility the fund's NAV has.

Fourth, on the premise of understanding the first three questions, we should seriously think about whether the expected risks and returns of this fund match our own needs. If the product risk is too low, you may not be able to achieve the expected return target, while the risk is too high may cause fluctuations that you can not afford, be sure to choose products that match your needs.

Fifth, when conditions are met, more attention should be paid to fund managers. Fund managers hold the investment power of the fund, which directly affects the performance of the fund. Investors can pay more attention to the fund manager's working years, managed products and performance, educational background, investment philosophy and style, etc., which will also play a very important reference role in selecting funds.

How do 2. "diagnose" a fund product "?

The core purpose of "diagnosing" a fund is to determine whether it has the potential to obtain better returns for investors, and the results of the diagnosis can be used as an important basis for investors to hold or replace the product. "Diagnostic" funds can start with the following dimensions:

One is historical performance. Short-term performance and 3-5 years of medium-and long-term performance should be combined to judge, a good fund long-term net value fluctuations are small, can achieve "bull market to keep up, bear market less loss".

The second is the annual ranking. Good fund products do not pursue to enter the forefront every year, but in the long run, if they can rank in the top 1/3 or top 1/4 in most years, they are very good fund products.

Third, the fund manager's years of employment. It depends on whether the fund manager's experience is long enough, whether he has experienced a complete bull-bear cycle, and whether his ability to control pullbacks and stock selection is excellent.

Fourth, the overall strength of the fund company. In general, the overall performance advantage of the products of fund companies with excellent investment research strength will be more obvious.

Five is the size of the fund. Moderate fund size is more suitable for fund managers to manage. If it is too small, it is difficult to fully diversify risks. If it is too large, it will not be flexible enough.

Six is the application of professional quantitative indicators. Sharpe ratios, maximum retracement, attribution analysis, etc., can get some more objective judgments, these data in some professional software platforms can also be easily queried.

How can 3. delve into fund products in multiple dimensions?

(I) Fund Company Dimension

1. Check the ranking and rating of the fund company to see if the fund company has a sound and perfect fund product system.

2. The investment style of the fund company can be viewed from the distribution and return analysis of the fund company's products. If a fund company has a large number of products and a wide layout in a certain type of fund, then it can be said that the fund company's business focus is biased towards that type of fund. If a fund company's income of a certain type of fund is particularly outstanding and maintains excellent performance in similar products for a long time, then the investment advantage of the fund company is concentrated in this type of fund.

3.4P standard of fund companies:

Investment philosophy (Philosophy), investors need to see whether the investment philosophy of the company to which the fund belongs is mature and effective, and secondly, whether they recognize this concept, and then whether they recognize the investment management model of the fund company.

The investment team (People), the strength of the professional competence of the fund's investment research team is an extremely important factor in the performance of its funds. Examine the strength of the fund company's investment research team, you can focus on observing the team's formation time and team stability.

Investment process (Process), a rigorous and scientific investment process can regulate fund management and make fund performance sustainable in the long term.

Investment performance (Performance), which evaluates the historical investment performance of the funds of the fund's company, can be used as an auxiliary reference for fund investment.

(II) Fund Manager Dimension

1. Historical performance of the fund manager: examine whether the fund manager has been employed in a company for a long time and has maintained steady growth in performance, and whether the investment capacity is comprehensive.

2. The investment philosophy of the fund manager: understand the investment philosophy of the fund manager to judge the future investment direction of the fund and whether it is in line with your own investment philosophy.

(III) Fund Performance Dimensions

1. Comparing the Fund's returns with performance benchmarks;

2. Comparing the Fund's returns with the broader stock market;

3. Comparison of returns with similar funds;

4. Compare the fund's current earnings with historical earnings.

(IV) rating agency dimensions

Currently recognized as the more representative fund rating agencies are Morningstar, Galaxy Securities, Haitong Securities and so on. The role of rating agencies is to rank the return and risk level of funds according to standardized rating standards through qualitative and quantitative methods, which is a fund inspection method that investors can learn from.

4. what is a fund rating?

Each public fund product has its own performance, so how do investors know whether its performance is relatively good or bad among a large number of similar products? The fund's ratings and rankings provide investors with a very convenient and intuitive way to understand the relative level of product performance.

Fund rating refers to the activities of fund evaluation institutions and their evaluators to conduct a comprehensive analysis of the investment income and risk of the fund or the management ability of the fund manager by using specific methods, and to display the results of the analysis using symbols, numbers or words with specific meanings. Rating results are usually expressed in stars, and the higher the star, the better the product evaluation level (usually five stars are the best).

Fund rating agencies are independent and fair third-party institutions, such as Morningstar, Galaxy Securities, Haitong Securities and so on. Fund evaluation agencies have membership of fund industry associations, and their evaluation results have a high influence in the market.