Edit: Rong 360 finishing
Source: Rong 360
Date: 2014-03-24

Summary:

The seven-day annualized rate of return is the annual rate of return of the average income of the money fund in the last seven days.

The annualized rate of return on the 7th can only be regarded as a short-term indicator. It can refer to the recent profit level, but it cannot fully represent the actual annual income of the fund. The income will fluctuate due to the fluctuation of the investment market. The seven-day annualized rate of return can be used by investors' currencies to compare fund returns with other investment products.

There are two indicators that usually reflect the rate of return on money market funds: one is the annualized rate of return on the 7th; the other is the unit of income per million units.

As a short-term indicator, the 7-day annualized rate of return is only the information of the fund's profit level in the past 7 days, and does not mean the future level of income. What investors really care about is the second indicator, which is the unit revenue per 10,000 units. The higher the indicator, the higher the investor's real return.

Under the different income carry-over methods, the formula for calculating the annualized return rate for seven days should also be different.

Currently, there are two ways to carry forward the money market fund:

The first is "dividends in the day and day, and carry forward on a monthly basis", which is equivalent to a single day profit, a compound month and month.

The second is "dividends on a daily basis, carried over by the day", which is equivalent to compounding on the day.

The formula for simple interest is: (∑Ri/7)×365/10000 copies×100%

The formula for compound interest is: (∑Ri/10000 parts) 365/7×100%.

Among them, Ri is the per 10,000 income of the most recent i-day calendar day (i=1, 2...7)

The fund's seven-day annual rate of return is rounded off to retain the third decimal place.

In some countries, the regulatory authorities have a strict calculation formula for the seven-day annualized interest rate: if the value of a currency fund before the start of the first day of trading is A, the value after the end of the transaction on the seventh day is B, the cost of the seven days. It is C (sometimes, such as Yu'ebao, etc., according to the situation of 2014/3/15, C=0).

The calculation formula for the seven-day annualized income is (B-A-C)/A/7*365*100%.

For example, a monetary fund will be worth 100 yuan per share before the market opens on March 1 (that is, A=100). After the market close on March 7, each share will be worth 101 yuan (that is, B=101). These seven days of buying and redemption. There is no charge for returning (that is, C=0). Then the 7-day annualized interest rate of this fund is (101-100-0)/100/7*365*100%

According to experts' analysis, the annualized rate of return on the 7th is based on the net income per 10,000 products in the past seven days, and then the annualized rate is calculated. The annualized rate of return on the 7th as the average indicator can only reflect the general fluctuation of the past seven days. The short-term seven-day annualized rate of return of a product may mean that the investment manager's operating style is more radical. The user's daily income is often a bit like riding a roller coaster. For ordinary users, the stable high income is the king.

The larger the monetary fund, the greater its voice in investing, and the higher the gains. But some monetary foundations use “regular products” or “self-subsidies” to express high returns, but such high returns are not sustainable.

Experts believe that compared to the seven-day annualized income, consumersFinancial managementMore should pay attention to the net income per 10,000 products or the total value of 10,000 yuan. The daily income of the day, which is the actual income of the day; and the annualized rate of return on the 7th is the conversion of the past seven days into the annualized rate of return, not the true rate of return per day. When investors look at product returns, they should focus on long-term performance stability.

In addition, investors should comprehensively compare products when they select products, including specific income, stability, ratio of purchase, flexibility, and usage scenarios. The good or bad of a product is actually a comprehensive competition.

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