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The retracement rate 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, that is, the loss interval. This is a historical indicator, which compares the past net value of the fund. The maximum retracement of the fund measures the maximum range of the fund net value curve from the peak to the bottom, and tests the fund manager's ability to grasp risks and trends.
The withdrawal rate refers to the extent that the net value of the fund falls from the highest position to the lowest position within a period of time, that is, the withdrawal rate = (historically high-historically low)/historically high × 100%. For example, the highest net worth of a fund in a month is 2 yuan and the lowest net worth is 1.0 yuan, so the withdrawal rate of this fund in this month is = (2.0-1.0)/2.0×100% = 50%.
In the fund market, investors can analyze funds according to the return rate of funds. Generally speaking, the greater the speed of capital withdrawal, the greater the chance of capital rebound and the greater the risk. For more radical investors, we can consider buying some funds with large withdrawal rate, while for funds with small withdrawal rate, their volatility is smaller and more stable. For prudent investors, you can buy some in moderation.
At the same time, investors should not only look at the maximum withdrawal rate, but also consider other factors such as performance when choosing funds.
The maximum withdrawal rate refers to the maximum decline in the expected rate of return of the fund within a period of time, and can also be simply understood as the maximum decline that may occur after purchasing the fund.
For example, if an investor buys a fund in 500 yuan, then the fund rises to the highest point in 600 yuan and then falls to the lowest point in 400 yuan, then 600 yuan to 400 yuan is the biggest possible loss of the fund, and the maximum withdrawal rate is: (400-600=-200)/600=-33.3%.
Generally speaking, the greater the maximum withdrawal rate, the more difficult it is to return the money. If the decline is large, the increase will be even greater if the capital is to be recovered. For example, if it falls by 30%, then the increase needs to reach 42.86% to recover the capital, which is difficult to achieve.
Theoretically, the lower the maximum withdrawal rate, the better, because the maximum withdrawal rate is also proportional to the risk. The smaller the maximum withdrawal rate, the stronger the risk control ability.
There are many ways to check the maximum withdrawal rate of a fund. Investors can log on to the official website of the corresponding fund company and find the information page of the fund. The historical maximum withdrawal rate can be seen from the historical net value of the fund. On the fund information page of the fund trading software, you can also roughly calculate the historical maximum withdrawal rate of the fund through the historical net value trend chart.