In the previous issues, we introduced the target date fund and the target risk fund in detail, and in this issue, we will take a look at the similarities and differences between these two types of products, and what things to pay attention to when choosing these two types of products.
1. Different points
(1) Investment strategy
Target date funds: Target dates are generally set based on the time of retirement. At the same time, this type of product will dynamically adjust the investment allocation ratio, gradually reduce the allocation ratio of equity assets and increase the allocation ratio of low-risk assets as the target date approaches.
Target risk fund: It mainly sets the target based on specific risks, and sets the allocation ratio of equity assets and non-equity assets according to specific risk appetite. The common types are conservative, stable, balanced, aggressive and aggressive, etc., and investors can choose according to their risk appetite.
(2) Product naming
Target date funds: Most of them are named after the retirement date, such as the pension target date 2045 three-year holding period mixed fund, the pension target date 0 five-year holding period mixed fund, etc.
Target risk fund: named after the approximate level of product risk, with words such as "stable", "balanced" and "active", such as "stable pension target one-year holding period mixed fund", "balanced pension target three-year holding period mixed fund", "active pension target five-year holding period mixed fund", etc.
(3) Suitable for people
Target-date fund: suitable for investors who determine the retirement time, and at the same time do not want to consider too much about the changes in their own risk tolerance, and hope to achieve the accumulation of pension assets through a one-stop investment plan.
Target risk fund: suitable for investors who have certain investment knowledge and experience, have a clear understanding of their own risk appetite and return expectations, and can choose corresponding products according to their own risk tolerance.
(4) Risk characteristics
Target-date funds: The risk decreases as the investor ages and the target date approaches. In the early stage of product operation, the proportion of equity assets is relatively high, and the risk is relatively large; In the later stage of the product's operation, it is dominated by fixed income assets with low risk.
Target Risk Fund: The risk of each risk type is relatively fixed. For example, if the risk of conservative funds is low and the risk of active funds is high, the risk level faced by investors will be relatively stable in the long term and will not change significantly over time.
2. Same point
(1) Investment purpose: It is a fund that pursues long-term steady appreciation of assets, encourages investors to hold it for a long time, and adopts the agreed asset allocation strategy for investment and operation.
(2) Mode of operation: It usually operates in the form of FOF (fund of funds), through the diversification of risks at the two levels of large types of assets and fund managers.
(3) Closed-end period: In order to encourage investors to hold for a long time and reduce the fluctuation of net value caused by short-term redemptions, both funds have a closed-end period or the shortest holding period for investors.
1. Clarify your own needs and risk tolerance
(1) Investment objectives: You can first calculate the amount of pension in the future, and then think about your expected pension living standards, so as to determine the investment objectives, and then plan how much you need to invest every month according to the size of the gap.
(2) Risk tolerance: Before investing, you must clearly assess your own risk tolerance. If the risk tolerance is low, you should choose a conservative target risk fund or a target date fund close to the target date; If you have a high risk tolerance and a longer investment horizon, you can consider a target risk fund with a higher equity allocation ratio or a target date fund that is farther away from the target date.
2. Understand fund products
(1) Fund type: Target date funds are suitable for investors who do not want to think too much about asset allocation and want one-stop pension planning, as long as they choose products that are close to their retirement date. Targeted risk funds are suitable for investors who have a clear understanding of their own risk appetite and want to control their own risk level.
（2）基金規模：盡量選擇規模不低於2億元的產品，避免基金因規模過小而清盤，同時也能讓基金經理有更多資金進行分散投資。不過，規模如果太大的話，基金經理調倉靈活度也會下降，建議盡量選擇規模百億元以內的產品；同時，還需要進一步關注同一位基金經理的累計管理規模。
(3) Performance: Priority is given to products that have been established for more than 0 years, or have been in operation for a full holding period, and check their performance in different time dimensions, such as the performance of the past 0 years and this year. If it can be in the top quarter of similar products in multiple time dimensions, it is more worthy of attention.
3. Understand the cost
(1) Subscription and redemption fees: The subscription fee rate may be different on different platforms, and some platforms may have discounts, or even zero subscription fees in the direct sales channels of fund companies. The redemption fee is based on the length of the holding period, and generally the longer the holding period, the lower the redemption rate.
(2) Management fees, custody fees and sales service fees: These fees are deducted from the fund assets every year, although it may not seem much, but the long-term accumulation will have a certain impact on the income, to compare the rate structure of different products, and comprehensive evaluation.
4. Inspect fund companies and fund managers
(1) Fund companies and teams: choose fund companies with strong investment and research capabilities, good reputation and standardized management, especially in pension investment, whether there is a special pension investment department, the composition of the team and the strength of the team.
(2) Fund manager: pay attention to the fund manager's investment experience, years of experience, and the performance of other funds managed. Experienced fund managers with stable performance are more likely to manage pension target funds well. At the same time, it is necessary to pay attention to the stability of the fund manager and avoid frequent replacement of the fund manager's products.
In addition, if a fund manager manages multiple products at the same time, it is important to further compare the different performances of these funds, and if the performance of the products varies greatly, understand the reasons.
5. Do a good job in investment planning and management
(10) Investment period: The pension target fund is a long-term investment product, and the investment period may be as long as 0 years or even longer. In addition to meeting the needs of the elderly, it can also meet other financial needs, but if there is a need for funds in the short term, it is not recommended to choose products with a longer investment period, so as not to be unable to exit in time.
(2) Investment method: It is not recommended to invest at one time, and you can use regular investment or low-level batch investment. This smooths out the impact of market fluctuations and reduces investment risks.
(3) Diversification: Do not concentrate all funds in one fund, you can choose several different pension target funds for diversification to reduce the risk of a single fund.
National Business Daily