pokerroomnearme| The relationship between fund growth and risk: Understand the correlation between fund growth and risk
The relationship between Fund increase and risk
In the field of investment, as an important investment tool, fund has attracted the attention of a large number of investors. When choosing a fund, investors tend to pay attention to the increase and risk of the fund. This article will explain in detail the relationship between fund gains and risk to help investors better understand this area.
I. the basic concepts of fund growth and risk
Fund increase refers to the increase in the net value of fund units over a certain period of time, usually expressed as a percentage. The fund risk refers to the risk of loss that investors may face after buying the fund. Fund risk mainly includes market risk, credit risk, liquidity risk and so on.
Second, the relationship between fund increase and risk
There is a certain correlation between fund growth and risk. In general, the higher the increase of the fund, the greater the risk it takes. This is because high increases often mean that funds invest in risky assets such as stocks and high-yield bonds. Low-risk assets, such as treasury bonds and money market instruments, rose relatively slowly.
III. Risk tolerance and fund selection
When choosing a fund, investors should judge according to their own risk tolerance. Investors with higher risk tolerance can withstand large fluctuations, so they can choose funds with higher growth and higher risk. On the other hand, investors with lower risk tolerance should choose funds with lower growth and less risk.
IV. Indicators for measuring the increase and risk of funds
In order to better measure the relationship between fund growth and risk, investors can refer to the following indicatorsPokerroomnearme:
The indicator name explains the Sharp ratio as a measure of the excess return on a portfolio for each unit of total risk. The higher the Sharp ratio, the better the risk-adjusted return of the fund. The maximum withdrawal measures the maximum losses that may occur to the fund in a particular cycle. The smaller the maximum withdrawal, the lower the risk of the fund. Volatility measures the degree to which the net worth of the fund fluctuates. The higher the volatility, the greater the risk of the fund.Through the above indicators, investors can have a more comprehensive understanding of the relationship between fund growth and risk.
In short, there is a close relationship between fund growth and risk. When choosing funds, investors should fully understand this correlation and make choices according to their own risk tolerance. At the same time, referring to the relevant indicators will help investors to better evaluate the risk-return characteristics of the fund.
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