How are the funds divided?
The purpose of fund splitting is to ensure that the investment portfolio remains unchanged, the fund manager remains unchanged, the fund share increases, and the net value of unit share decreases. It does not affect the realized expected income, unrealized income and paid-in funds of the fund.
What needs to be emphasized above is that fund splitting will only reduce the net value.
Many investors are worried that the decline in unit net value after the split will affect the expected return, which is nothing to worry about and has no substantial adverse impact on investors' rights and interests.
Reasons for the division of funds
1. In order to reduce the price sensitivity of investors, fund splitting is conducive to the continuous marketing of funds, improving the structure of fund share holders and helping fund managers to operate funds more effectively.
2. The split fund mainly has excellent past performance and high net value of the fund to meet the psychological needs of investors and attract investors to invest.
Many investors' investment strategy is to buy funds with low net worth, so as to gain more shares and redeem more money, because this psychology, if split, will attract more investors to buy.
3. Preventing funds from being forced to pay dividends can effectively reduce transaction costs and reduce the impact of day trading on the securities market.
All of the above are opinions about how the fund split is going on, and I hope it will help everyone. Warm reminder, financial management is risky and investment needs to be cautious.