Why is there a fund conversion?
Unlisted funds can only be converted regularly, and listed funds can be converted regularly and irregularly.
1, periodically converted
At this time, the share of B may have exceeded the value of A 1 or 2, and the fund company decided to pay dividends. It will be converted from time to time, and the purpose of discount at this time is to restore the high leverage of the fund.
No matter what the net value of the fund is, the main purpose is to protect the interests of A share holders. Simply put, rising too well or falling too badly will lead to irregular conversion of graded funds, all of which will be converted.
2. Irregular transformation
The treatment of irregular conversion is different, and the discount of graded funds usually means that the net value of B shares falls to zero, which triggers the discount.
Is the fund share conversion a loss?
According to the reasons for the above conversion, we can understand that the behavior of fund conversion may indeed be due to serious fund losses, but we also see that this is not the only situation.
When investors encounter fund conversion, they must first understand the reasons for the fund conversion. If the share of Fund B exceeds 1 and 2, then the discount is only a dividend, which has little impact on investors. If the conversion is due to the sharp decline of the fund, it does not bode well for investors, and investors should take measures as soon as possible.
The above content about fund share conversion is here, I hope it will help everyone. Warm reminder, financial management is risky and investment needs to be cautious.