Do active funds buy with their eyes closed and make money if they hold them for a long time? I have already said in the previous article, it is not the case, and everyone understands the reason. I won’t go into details here. Be careful when buying active funds!
The core content I want to discuss today is: Is buying an active fund really an excess return compared to buying an index fund?
Let’s look at a picture first. The following figure is a comparison chart of the Wind partial stock mixed fund index and the ChiNext index in the past 10 years. The Wind partial-share mixed fund index includes more than 1,800 partial-share mixed active funds in the A-share market, which can be regarded as the average level of partial-share mixed funds.
See something? The trend of the two in the past 10 years is highly matched! What does this indicate? In the past 10 years, the excess returns of the so-called active funds are actually the same as the ChiNext Index. It can be said that it is a copy of the ChiNext Index! Where is the excess return? Compared with the CSI 300 Index, active funds have excess returns. But compared to the ChiNext Index, there is no active fund!
I can also make a bold inference: the excess returns of active funds in the past 10 years actually come from Baotuan GEM stocks! Therefore, the trend of the Wind partial stock mixed fund index is basically the same as that of the ChiNext! So will the next 10 years be Baotuan GEM stocks? I do not know! It may be reported, or it may not be held! Is it possible to hold CSI 300, or CSI 500, or CSI 1000 in the next 10 years? Unknown! Who knows which section will be rotated? You see, hasn’t the ChiNext fell sharply in recent days, and the Shanghai Composite Index has been rising for a few days in a row?
So how can we achieve average returns? Either you buy all active funds and pursue the average return of active funds. Either you allocate the various broad index funds equally, wait for the wind, and pursue the average return of the index. Note, I’m just talking, not suggesting that you buy funds. Funds are at risk! I am empty now.
Someone else said, then we can buy those excellent funds, which rise more than others, fall less than others, and have excess returns than average! Come, come, tell me, which funds will rise more than others and fall less than others in the future? you sure? Then don’t hurry to sell the house, sell the blood, sell the kidney and go to Stud! The funds you screened out using various strategies are all excellent funds in the past! Excellent in the past, will most likely be excellent in the future? I’m skeptical about this. The specific reason, the regression of the mean! I have already explained this in the previous article, so I won’t repeat it here.
Based on the law of mean reversion, the excess returns of active funds relative to index funds will definitely be wiped out in the long run! You see the excess returns in the past, you can see them, but you can’t earn them! Because you can’t go back in time to buy a fund, you can’t earn the high returns it used to be! Like, why didn’t you buy bitcoin 10 years ago? With the rearview mirror, everyone is a stock god, and everyone can become the richest man in the world!
In my opinion, all attempts to obtain excess returns are futile and only average returns in the long run. Those who have succeeded in obtaining excess returns are just survivor deviations, similar to monkeys throwing darts! There is always someone with good grades, and you can’t be sure who he is! Just like guessing the size, as long as there are enough people, there will always be someone who can guess right in a row! $ Shanghai Index (SH000001)$ $ CSI 300 (SH000300)$ $ ChiNext Index (SZ399006)$ #Top fund managers leave their posts, should they stick to it or redeem it? # #Stable assets rise! The interbank deposit certificate fund sold 30 billion # #Taihui Funds are recovering collectively, is it worth the layout?#
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