Newbie how to judge the fund style

Newbie how to judge the fund style

A stock market style switching is more frequent, we bought the fund should be after the fund's position and investment in the theme of the style of review and confirmation. I am here to organize how to judge the fund style, for your reference, I hope you have gained in the process of reading!

How to Judge Fund Style

Usually, there are two types of styles we are concerned about, one is the market capitalization, that is, the large, medium, and small-cap styles, and the other is the valuation, that is, the growth, balance, and value styles.

It's not easy to determine which investment style a fund manager belongs to, and there's no standard indicator in the market that defines "which styles of fund managers are out there".

A simple and crude way is to check the fund's third-party platform's nine-grid.

But this kind of nine-grid division is actually a vague correct, in addition to the active fund data is published on a quarterly basis, there is a certain lag.

So we need to look at fund managers, fund positions, etc. to assist in judgment. If you understand the fund manager, you will know roughly what kind of investment logic he has and what kind of market he is suitable for.

1, look at the fund manager

Fund manager to see what? Mainly can look at its background, investment experience and historical performance

(1) investment experience: investment experience, such as from the researcher, assistant fund manager to the fund manager, and also experienced the bull and bear market cycle of the fund manager, relatively speaking, the control and judgment of the market may be more accurate.

You can compare the number of years a fund manager has been in business with the A-share market. Those who have experienced many rounds of bulls and bears of fund managers, is the market scarce resources.

(2) background: here the background refers to the school's professional, after the practice of the field of study, such as Glenn is a doctor of medicine, research on the pharmaceutical industry has a natural advantage; and then Zhou Yingbo, has done the Tencent product manager, robotics competition champion, these will also affect the fund manager's investment logic, etc.

This is the first time that the fund manager has been in the market for a long time.

General management of industry-themed funds fund manager class origin more, of course, with the fund manager more years, will also expand their ability circle (industry research areas, etc.).

(3) Historical performance: looking at historical performance is mainly to see whether past performance is consistently good. For example, the annual performance and benchmark comparison, and the broader market comparison; bull market, bear market, shock market performance under different market conditions; the control of risk (maximum retracement of the index compared to how); but also to look at the performance of each of the above dimensions of each of the funds they manage?

If the selected fund manager management product performance is superb, but back in the bull market situation, then there will be a judgment → may be the performance of the market to bring rather than the fund manager to bring active management. This is why there is a "champion curse".

2, look at the position

(1) stock and bond ratio

First of all, look at the active fund stock and bond ratio. This is the one factor that has the biggest impact on returns. This is because stocks and bonds, the two broad asset classes, have very different return and risk characteristics. For this stock-bond ratio, you need to look at data from the past round of bull and bear markets, that is, since the 2015 bull market. This is because there are active funds that allocate different ratios of stocks and bonds depending on market valuations. For example, during the bear market, the proportion of stocks is high, and in the middle and late stages of the bull market, the proportion of stocks will be reduced. If the bond ratio increases after the fund will become a little less volatile; long-term to maintain a high proportion of equity funds, the return and risk will be higher.

(2) Holding Industry Concentration

Second, look at the industry concentration of active funds.

In other words, look at the active fund and see if it will concentrate on one or two industries, and if it concentrates on one or two industries, the volatility will be higher.

There is a category of active funds that will state in the name of the fund, which sectors they mainly invest in.

For example, so-and-so consumer and so-and-so pharmaceutical funds, which have about the same risk of volatility as a general sector index fund, and a bit more than a broad-based index such as CSI 300.

(3) Concentration of long positions

Third, look at the concentration of long positions in active funds.

In addition to sector concentration, the concentration of stock holdings, also affects the investment style of active funds.

If the holdings are too concentrated, it will also increase the volatility risk of the fund.

Index funds, usually require a diversified allocation of 50-100 constituent stocks.

For active funds, on the other hand, you can concentrate your holdings, typically with a heavy position in 10-15 stocks.

Concentrated investment has its pros and cons. If the fund manager has strong investment skills, concentrated investment can help boost returns, but it can also increase the risk of volatility, or artistry.

Active funds raise the risk by concentrating their investments in exchange for potentially higher returns. Most active funds are a bit riskier than indexes and are high-risk, high-yield varieties.

(4) Market capitalization and growth of holdings

If categorized by market capitalization, stocks can be divided into large-cap, mid-cap and small-cap stocks, and if categorized by growth, they can be divided into value, balanced and growth.

There is no clear standard for judging large, medium and small-cap stocks, there are market capitalization of more than 2 billion is a large-cap stock, less than 30 million is a small-cap stock as a standard of judgment, there are also Shanghai and Shenzhen two cities in the first 100 of the largest size of the largest stock for the large-cap stock, followed by 200 is a medium-cap stock, outside of the small-cap stock as a standard of judgment.

Value generally refers to high dividend, mature industry, slow-growth sector stocks, while growth generally refers to low-dividend, volatile, fast-growing industry stocks, balanced between the two.

The style itself is not superior or inferior, in terms of volatility, small-capitalization growth funds, because of the small market value of the stocks held, the volatility of the industry, the fund itself is relatively large fluctuations. And the large-cap value type will be relatively stable.

The higher the proportion of stocks, the higher the concentration of industries and long positions, the more offensive small-cap growth-oriented active funds, and more volatile. On the flip side, increasing the bond percentage and diversifying sectors and stocks will be more defensive.

Before investing, focus on the above indicators to find quality fund peers that match your style philosophy, in order to walk firmly and long term on this path. If you can't decide which is better, defensive or offensive, you can also have a balanced allocation.

Meaning of the fund

Fund (Fund) has a broad and narrow sense, broadly speaking, refers to the establishment of a certain number of funds for a certain purpose, such as trust investment funds, provident funds, pension funds, etc., narrowly speaking, refers to funds with a specific purpose and use of the funds, usually referred to as the fund refers to the securities investment fund. The income of securities investment funds comes from the future, and the performance of the income is inextricably linked to the performance of the underlying market of the investment, which carries a certain degree of risk.

How to diagnose whether the fund style is floating

The first step: to determine the fund's "name"

One look at the name of the fund: Efatar small and medium-sized mixed, for example, from the name of the roughly can be judged to be the small and medium-capitalization stocks of its investment style.

The second look at the fund's prospectus: Efatar small and medium-sized mix of the prospectus of the fund's investment philosophy is expressed: to explore the higher growth of small and medium-sized stocks.

Third look at the fund's performance comparison benchmark: Efatar Small Cap Mix's performance comparison benchmark is: 45% x Tian Xiang Mid-Cap Index return + 35% x Tian Xiang Small Cap Index return + 20% x China Total Bond Index return.

Combining the above information, you can determine that the nominal style of Efatar Small Cap Mix is small and mid-cap growth.

The second step: to determine the fund's "real"

Efonda's small and medium-sized mixed top ten positions in the health of the United States, Wuliangye, Guizhou Maotai, Hualan Biologicals, Nepal, Torch High-tech are all constituents of the CSI 100 index, the fund's actual style is more inclined to large-capitalization stocks.

While the fund is known as a 'small and mid-cap' fund, the actual style of holding positions is more inclined to large-cap stocks, which can be said to be very "disingenuous".

The drift of the fund products mainly comes from two aspects, one is the short-term style drift of the fund products brought about by the change of fund managers, and the other is the fund style drift brought about by the change of fund managers' style.

For both institutional and individual investors, style drift poses certain risks. Funders are generally matched with a fund that suits them based on the fund's investment style and investment objectives, combined with their own investment preferences and risk tolerance.

If the fund style drift, the fund buyers to buy a fund is like buying a blind box, do not know the allocation of assets in the end in which a thematic sector, facing the risk of investing in the fund and their own can not match. Some fund managers style drift is outside the circle of competence, "the surge", the serious is a breach of contract dishonest behavior, the base will be forced to bear the risk of unfamiliar areas of investment with them.

But style drift is not always bad. There is a view that style drift reflects the fund manager's keen ability to capture changes in market conditions and stock market styles, adjusting strategies in a timely manner and achieving good performance highlights part of its active investment capabilities, as long as it can bring considerable returns on the nothing to be ashamed of. For the past poor performance of the fund, fund managers who choose to take the initiative to adjust the investment strategy to improve the performance of the fund, it may change the fund's investment style, but the new style will also bring new opportunities.

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