How to calculate the returns of net value-based financial management

Calculation Formula#

Daily Return = Held Shares * (Latest Net Value - Previous Trading Day Net Value)

The final calculated return value is retained to two decimal places, and I feel it should be rounded, with a minimum of 0.01 yuan, meaning the smallest unit of return is the Chinese yuan cent.

When calculating returns, it is based on the purchased shares and does not factor in the invested amount.

Return Distribution Rules#

Return distribution rules: Returns start to be calculated after confirming shares, and when there is a change in net value on trading days, the returns for T day are distributed on T + 1 day.

In other words, the returns from yesterday will be credited on the next working day (specifics also depend on the product introduction), and holidays or weekends will vary according to the product introduction or notifications.

Example#

For example, if an investor purchases at a net value of 1 yuan on the same day, and the current net value is 1.1 yuan, then the change in net value will be: (1.1 - 1) / × confirmed shares at the time of purchase = 10%.

A practical example is as follows:

Buy on September 21, the data for that day is:
- Net value for the day: 1.004080
  According to the trading instructions, the confirmed shares will be on September 24, and returns will start to be calculated from that day (because September 21 - September 22 is a weekend, so the confirmation of shares has to wait until the next week, and there are no returns for that weekend).
Returns on September 23:
- Net value for the day: 1.004080
- Returns: (1.004080 - 1.004080) x 24.49 = 0 yuan
  Interpretation: (Net value on September 23 - Net value on September 21) x confirmed shares after purchase, since it is the same as the net value at the time of purchase, the return for this day is 0 yuan.
Confirmation of shares on September 24, and returns for that day:
- Shares: 24.49
- Net value: 1.004150
- Returns: (1.004150 - 1.004080) x 24.49 = 0.01 yuan
  Interpretation: (Net value on September 24 - Net value on September 21) x confirmed shares after purchase, the final calculated result is 0.001714300000000355, since the minimum unit is a cent and rounded, the minimum is 0.01 yuan, so the final return is 0.01 yuan.

Summary#

So, I finally understand why it is called a net value product, returns vary according to changes in net value and have nothing to do with the yield rate, so when purchasing net value products, don’t always focus on the yield rate to switch products.