Leveraged fund is a kind of hedge fund. Domestic leveraged funds belong to the leveraged share (also called aggressive share) of graded funds. Graded fund refers to a fund variety with two levels (or multi-levels) of risk-return performance with certain differentiated fund shares through the decomposition of fund income or net assets under a portfolio.

Compared with general equity funds, leveraged funds have higher returns and higher risks than bull markets. In a bear market, leveraged funds tend to have low returns and high risks. More than 80% of the assets of equity funds invest in the stock market, enjoying high returns and higher risks, but not lower than leveraged funds, and there is no discount. Investors can pursue high returns according to leveraged funds in the bull market, and equity funds can choose fixed investment appropriately.

The main feature of graded funds is to divide fund products into two types of shares and give different income distribution respectively. Graded funds are usually divided into two types of shares: low-risk income side (agreed income share) sub-funds and high-risk income side (leveraged share) sub-funds. Graded funds actually belong to leveraged fund products, that is, funds that adopt structured grading technology. By integrating short-term funds at a lower cost, fund managers invest in longer-term assets that can generate higher returns in order to obtain higher investment returns for fund holders.

Through its unique fund income distribution system, graded funds re-divide the risk income of funds and establish leverage effect to meet the needs of investors in pursuing specific high income or specific stable income. ?