Causes of healthcare fund blowups_Can healthcare funds blow up too
Why do healthcare funds blow up too? Shouldn't healthcare funds be more stable? The specific how to burst it? The following is the reason why the medical fund burst, I hope it can help you.
Reasons for medical fund outburst
The reasons for medical fund outburst may be related to the following factors:
Investment strategy failure: the investment strategy of the medical fund may include investing in stocks of the medical industry, pharmaceutical companies, or manufacturers of medical equipment, and so on. If the fund manager makes mistakes in selecting stocks or adjusting the portfolio, chooses companies that do not have good growth prospects, or is affected by factors such as policy adjustments in the healthcare industry, the net value of the fund will fall.
Market volatility and risk: The healthcare industry is subject to certain market risks, such as the failure of new drug development, changes in regulatory policies, and increased competition, all of which may have an impact on healthcare funds. Market volatility and uncertainty may also expose healthcare funds to risk, resulting in a decline in the fund's net value.
Global health issues: Worldwide public **** health emergencies (e.g., the COVID-19 epidemic) have had a significant impact on the healthcare industry, which may adversely affect investments in healthcare funds.
Redemption pressure: When investors redeem healthcare fund shares in large quantities, fund companies may need to sell their healthcare holdings to meet the redemption demand. This could lead to a drop in the fund's net value if there is a lack of liquidity in the market or a wave of selling.
It should be noted that although the healthcare industry has a relatively stable growth trend and good long-term investment potential, healthcare funds may still be exposed to market volatility and other investment risks. Investors should carefully evaluate the professional competence of the fund manager, the fund's investment strategy and the fund's risk management measures when choosing a healthcare fund in order to make a more informed investment decision.
Why medical funds have been in a slump lately
Most investors, for the most part, don't have a clue about what investing is. They also have no concept of valuation to speak of.
Because with any asset, there is a valuation problem. That's why there are professions like asset appraisers, real estate appraisers, and land appraisers on the market. The financial markets are no exception: whether a company's stock, and a fund, is worth investing in is, in fact, a matter of valuation.
Since the beginning of 2020, when an unanticipated epidemic struck, a lot of lobbyists have begun to pour within healthcare assets - funds are, in fact, derivatives of capital markets. The net worth of many equity funds is dependent on the price of stocks. And the price of a stock, and essentially its value, are two concepts: the price of a stock is, to a large extent, based on a market valuation basis. In other words, suppose an investor thinks that this company has a future, so he or she buys up the company's stock in a big way, which ultimately leads to an oversupply of the company's stock, and so the stock price soars. But this kind of prognosis, many times, is wrong - and it has led to many stocks that have skyrocketed, and then people realized that the stock wasn't worth the price, so they dumped it in droves, ultimately leading to an avalanche of stock prices.
And the influx of money can also lead to bubbles in assets: a stock that is reasonably valued at $20 a share, for example, is hyped up to $200, which is typical of bubbles.
In fact, the reason why nowadays, many pharmaceutical funds are not prosperous, the main reason is: in the past, a large number of funds under the speculation, the price of many pharmaceutical stocks, has long been a serious bubble. Therefore, even if the market demand for pharmaceutical products is high and the performance of pharmaceutical companies is good, it will take many years to make the company's performance enough to absorb the current share price. This is one of the reasons why, today, healthcare funds are always in a slump.
In summary: Any asset that grossly exceeds a reasonable valuation also means that the asset, for the time being, has lost its investment value.
Why funds blow up
Funds blow up means that the fund has lost a lot of money, generally it may be that the securities in which the fund manager invests have fallen very much, or it may be that the fund manager has added leverage, but the leverage was added after the stock or bond moved in the opposite direction of itself, and thus the blow up occurred.
China's public funds generally do not burst, but there may be asset allocation ratio of more than 100% of the situation, that is, it may be the fund manager through the bond pledge repo financing leveraged transactions, when the pledged bond prices fell, and the fund manager pledge to get only part of the money investment losses, it may be a big loss.
Public funds in the investment of a systematic and strict leverage restrictions: open-ended fund leverage (i.e., total fund assets/fund net assets) shall not exceed 140%, regular open-ended fund closed operation period leverage shall not exceed 200% open period leverage shall not exceed 140%.
In addition, China's private equity fund may burst, because the risk of private equity fund itself is relatively large, some equity private equity fund when the investment in the company has not yet listed, it means that the private equity fund losses, resulting in the fund burst.
Fund burst is a loss or gain?
Usually, the fund is not going to blow up
Unless you buy a futures fund or a fund with leverage. That's why there's talk of a blowout. A few years ago when there were classified funds folded also a bit similar to the burst position.
After the burst position is almost all the money left, right. So the burst position is a loss.
What is called a hedge fund using hedge trading means of the fund is called a hedge fund (HedgeFund), also known as hedge funds or hedging funds.
It is a financial fund that combines financial derivatives, such as financial futures and financial options, with financial organizations for profit.
It is a form of investment fund, which means "risk-hedged fund". Hedge funds use a variety of trading instruments to make huge profits by hedging, swapping, hedging and hedging. These concepts have gone beyond the traditional risk prevention and return protection operations. This, coupled with the fact that the legal threshold for launching and setting up a hedge fund is much lower than that of a mutual fund, further increases its risk.
Hedge funds and securities investment funds for ordinary investors not only in the fund investors, fund-raising methods, information disclosure requirements and the degree of supervision there is a big difference. There are also many differences in the fairness and flexibility of investment activities.
Securities investment funds generally have a clearer definition of the asset portfolio. That is, in the choice of investment tools and proportion of a defined program, such as balanced fund refers to the fund portfolio in stocks and bonds roughly half, growth fund refers to focus on high-growth stock investment; at the same time, *** with the fund may not use credit funds for investment, while hedge funds are completely free of these aspects of the restrictions and definitions, can use all the operable financial instruments and combinations of maximize the use of credit funds in order to make excess returns above average market profits.
Hedge funds play an important role in the speculative activities of modern international financial markets due to their highly covert and flexible operation and leveraged financing effect.
How do I invest in funds to make money?
1 choose the fixed bid: the fund fixed investment to make money is based on a good fund. For us, choosing a good fund product is the top priority. We need to the fund's historical performance, maximum retraction, position distribution, investment style, fund manager and other kinds of information are screened and compared to ensure that the root is not a problem.
2 Determine the fixed investment cycle: For the fixed investment cycle, there are often daily fixed investment, weekly fixed investment, monthly fixed investment, as well as irregular fixed investment. Among them, according to statistics, no matter how the market changes, daily fixed investment, weekly fixed investment and monthly fixed investment yield curve is almost similar, the return is not much difference, and there will not be the case that the higher the frequency of fixed investment, the higher the return is also higher. Among them, the monthly fixed investment time is very suitable for setting in the second day or the third day after the payday, because it can help us to force the savings, suitable for self-control is weak, like spending friends.
And irregular fixed investment, that is to say, do not set a fixed time to invest, but choose to buy in the falling market, which is more suitable for more understanding of the fund has a certain amount of research investors, can daily attention to its market, have a certain amount of time and energy.
3 fixed investment amount: assuming that the cycle of our fixed investment has been determined, then the amount of fixed investment should be a fixed amount and not fixed amount of two cases. Fixed amount of words is very easy to understand, that is, every investment is the same amount, not fixed amount of words, you can take in the market situation when the decline in the proportion of increased investment in the market rise, reduce the amount of investment.
4 save fixed investment costs: in the investment process, if we can save more costs, it is also equivalent to our rate of return increased. Here we try to minimize the fund's transaction costs, such as redemption fees, sales service fees, and commissions for buying and selling on-market funds. In addition, the correct choice of fund dividends is also a technique that allows us to rise in long-term earnings, cash dividends can allow us to fall into the bag, not only so that the floating surplus into real money, but also save in addition to our redemption fee. If the dividends are reinvested, then it allows us to increase fund shares.
While the fund dividends will be ex-rights, that is, the equivalent of the left pocket money in the right pocket, and did not immediately additional increase in our earnings, but after the ex-rights will be filled in, as long as the long-term stability of the dividend, then ex-rights brought about by the price drop will be made up back, so for us is a long-term benefit.
5 timely stop profit: to know the fund fixed investment is a long-term investment, but this is also a period, we have to learn to stop profit in the right position. Generally speaking, we invest in a large cycle of time, it is best to take the bull market and bear market as the node, especially our stock market is still a short bull state, so we have to find the right opportunity to stop profit when the bull market comes.