The up-discount and down-discount of graded funds refer to the practice that graded funds regularly or irregularly convert the net value of A and B shares under the parent fund in order to adjust leverage or rationally distribute the interests of holders.

There are generally two situations for regular conversion: the first working day of each year or the open day after the fund has completed one operation cycle; Some funds convert A and B shares separately, while others convert parent funds and A shares.

The irregular discount of graded funds is usually converted when the net value of the parent fund rises to a certain extent, and the conversion information is published.

reasons for discount: unlisted funds can only be converted periodically, and listed transactions can be converted periodically and irregularly.

Regular conversion

At this time, B share may have exceeded a certain value, such as 1.5 or 2, and it will be converted irregularly. At this time, the purpose of folding up is to restore the high leverage of the fund.

regardless of the net value of the fund, the main purpose is to protect the interests of the holders of A shares. To put it simply, if it rises too well or falls too badly, it will trigger the graded funds to convert irregularly, and all of them will be converted.

irregular conversion

irregular conversion is handled in different ways, while the discount of graded funds usually means that the net value of B shares falls to zero, and the graded funds trigger the discount.