Why is the annualized return of 50%, still can not become a stock god?

A small partner asked me: "How much can the return on your fund's investment reach?" I said: "If you take a product innovation and upgrade Class A product that I have been managing since its inception, the historical annualized rate of return is 26.14%. (The Fund was established on 2014.05.06, and Zhang Hui took up office on 2014.05.06.) Source of performance data: Huatai Berry, reviewed by the custodian bank, as of 2021.10.29. ）

In the eyes of many investors, this annualized rate of return is not high, after all, in the ChiNext board or the science and technology innovation board is also a matter of more than one rise and stop board, and the annualized yield of many funds reaches more than 100%. In fact, Buffett's annual return on investment is about 20%, but why can Buffett, who earns 20% a year, be called a stock god?

20% annualized is not equal to 20% per year

First of all, we need to know that Buffett earns 20% a year, not just for a year or two, but for many years. Buffett's investment legend has been more than 60 years ago. In more than 60 years of investment career, the annualized rate of return has remained above 20%, and Buffett is probably the only one in the world who can do this.

Although most investors can earn more than 100% per year, it is estimated that it will remain for two or three years at most. The significance of making more than 100% in a bull market and making 20% in a decades is not the same, because many people who make more than 100% in a bull market can do it.

Funds with a shorter period of establishment tend to have much higher annualized returns than funds with a longer establishment, and it is precisely because the measurement time of new funds is shorter, which does not mean that the subsequent returns can be 20% per year. The reason why the annualized return of some funds is low in the long run may be because the fund manager is often replaced, each fund manager has its own investment style and investment strategy, and the replaced fund manager may not be able to meet various markets and cycles for a while, and even lead to changes in the style of the fund.

Champion Fund VS. Balanced Fund

In investment, those who are five times a year are like carp across the river, and those who double in five years are like the morning star. There are many funds that are excellent in the short term, but few are excellent in the long term and can bring stable returns to investors.

"Champion funds" tend to perform very well at a certain stage because they concentrate on stocks that conform to the market style, but style rotation is the eternal theme of the market, and no one can always step on the wind. For example, some popular sectors may be able to perform in the short term in two years, but if the market style switches, short-term performance is more difficult to maintain in the long-term dimension.

On the contrary, instead of pursuing the ultimate choice of a relatively balanced fund, it can diversify the risk of investing in a single theme, even if the annual return lags behind the "champion fund", but the long-term return may be very good.

Investment is a long-term battle, in the bull market everyone can become a stock god, once or twice high yields, can not determine the long-term income performance. Only with sustainability and long-term stable profitability can we finally survive.

Mr. Zhang Hui's product historical returns under management: derived from the Fund's periodic reports.

Huatai Barry Innovation and Upgrading A was established in 20140506, Zhang Hui's tenure date is 20140506, and the income in the first half of 2016-2021 is: -13.31%, 35.08%, -12.82%, 38.69%, 61.82%, 2.21%; the performance benchmark is: CSI Emerging Industry Index Yield * 40% + China Bond Total Index (Full Price) Yield * 40% + CSI TMT Industry Thematic Index Yield * 20%, In the same period, the revenue was: -16.08%, -16.29%, -18.39%, 24.22%, 22.61%, 4.02%. Huatai Berry Innovation and Upgrading C was added to the 20200820, Zhang Hui's tenure date is 20200820, and the income in the first half of 2020-2021 is: 9.27% and 1.85%; the performance benchmark is: CSI Emerging Industry Index Yield * 40% + China Bond Total Index (Full Price) Yield * 40% + CSI TMT Industry Thematic Index Yield * 20%, the same period of income: 1.99%, 4.02%. Huatai Berry Innovation Power was founded in 20150206, Zhang Hui's tenure date 20150206, 2016-2021 first half of the income is: -13.98%, 30.39%, -12.89%, 43.17%, 70.02%, 5.28%; the performance benchmark is: CSI Emerging Industries Index yield * 60% + China Bond Total Index (full price) yield * 40%, the same period of income: -11.70%, -4.76%, -16.32%, 20.64%、27.98%、4.60%。 Huatai Barry Research Select A was established in 20191119, Zhang Hui's appointment date 20191119, 2020-2021 first half of the income is: 60.43%, 3.13%; performance benchmarks are: CSI 800 index yield * 80% + Shanghai Treasury bond index yield * 10% + bank demand deposit interest rate (after tax) * 10%, the same period of income: 21.13%, 1.70%. Huatai Berry Research Select C was added to 20201020, Zhang Hui's tenure date 20201020, 2020-2021 first half of the income is: 9.48%, 2.88%; performance benchmarks are: CSI 800 index yield * 80% + Shanghai Treasury bond index yield * 10% + bank demand deposit interest rate (after tax) * 10%, the same period of return: 5.90%, 1.70%. Huatai Berry Boom Return One Year A/C was established in 20191218, Zhang Hui's tenure date 20191218, 2020-2021 first half of the income: 58.43%/58.04%, 4.54%/4.42%; performance benchmarks are: CSI 800 Index yield * 80% + Shanghai Treasury Bond Index yield * 10% + bank demand deposit interest rate (after tax) * 10%, the same period of income: 21.13%/21.13%, 1.70%/1.70%. Huatai Berry Prosperity Preferred A was established in 20200617, Zhang Hui's appointment date 20200617, 2020-2021 first half of the income: 18.17%, 3.66%; performance benchmarks are: CSI 800 index yield * 60% + Hang Seng index yield (using valuation exchange rate conversion) * 20% + bank demand deposit interest rate (after tax) * 20%, the same period of income: 15.57%, 2.22%. Huatai Berry Prosperity Preferred C was established in 20210219, Zhang Hui's tenure date is 20210219, and the performance benchmark is the same as A share.

Risk Warning: If you need to purchase relevant fund products, please pay attention to the relevant regulations on investor appropriateness management, do a good job of risk assessment in advance, and purchase fund products with a matching risk level according to your own risk tolerance. Past performance of a fund is not indicative of its future performance and the performance of other funds managed by the fund manager does not constitute a guarantee of the performance of the fund. Fund investment needs to pay attention to investment risks, please read the fund contract and fund prospectus carefully to understand the specific situation of the fund.