Due to the domestic restrictions on the participation of large financial institutions such as funds in stock index futures, most of the more popular leveraged funds in the market are based on indexes, which are leveraged by fund classification, forming a hierarchical leveraged index fund. Hierarchical fund is a structured securities investment fund that divides the fund shares into two types of shares with different expected returns and risks through the arrangement of fund income distribution, and lists one or two types of shares for trading. Generally speaking, among the two types of shares divided by the fund's basic share, one is the part with low expected risk return and priority in income distribution, which is called "Class A share" here, and the other is the part with high expected risk return and secondary priority in income distribution, which is called "Class B share" here. Similar to other structured products, Class B shares generally "borrow" the funds of Class A shares to amplify the income, which has certain leverage characteristics. It is precisely because of the "borrowing" of funds that Class B shares generally pay "interest" on a certain benchmark of Class A shares. At the same time, the design mechanism of graded funds is different, and the split ratio of the two types of shares is also different.

Investors should also deeply understand the product characteristics of each leveraged fund, such as the change of leverage ratio, asset allocation, share conversion, matching conversion, etc., and choose the graded fund corresponding to the underlying index and leverage ratio. Due to the high volatility of leveraged funds, it is very necessary for every investor to choose a leveraged index fund with appropriate leverage ratio and establish a sound risk control system.

There are three different investment methods for graded funds: first, for the traditional OTC fund share, its essential feature is open-end fund, which is mainly based on medium-and long-term holding strategy. Secondly, Class A share investment will hold it as a low-risk allocation object for a long time, with high income guarantee; For B-shares, the main investment method in the current market is to earn the secondary market price difference. Generally, Class B shares have leverage, which will show much higher elasticity than the underlying index in the staged market and have higher investment opportunities. During the rising period of the market, high-risk stocks will have the opportunity to obtain excess returns. Of course, when the market is in the downtrend channel, it will inevitably bear more downside risks.

The premium rate of leveraged funds is reflected by the price difference of its leverage mechanism in the secondary market. According to its trend, it shows different premium rates.