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How to understand the upward conversion of graded funds
The reason why graded funds set up irregular conversion is because when the net value of funds rises or falls sharply, the leverage of B share of graded funds (hereinafter referred to as "B share") will also decrease or increase. When the net value of the basic share (usually called "parent fund") reaches 1.5 yuan, the net leverage of share B is about 1.5 times. In order to prevent the increase in the net value of basic shares from further reducing the leverage level of B shares, the contract terms of graded funds usually clearly stipulate the conditions for irregular upward conversion.

The principle of irregular conversion of graded funds is to rebalance the basic share, net value and share of graded funds. Take Penghua's non-bank financial management classification as an example. When the upward conversion is triggered, the net value of Penghua's non-bank B share is much larger than that of Penghua's non-bank A share. The specific way of rebalancing is to convert all the net value of Penghua Non-Bank A share and Penghua Non-Bank B share greater than 1.000 yuan into basic shares. Next, through share rebalancing, the net value of the basic share is adjusted to 65,438+0.000 yuan, so that the net values of the basic share and the sub-share are both 65,438+0.000 yuan.

It can be seen that irregular upward conversion does not affect the number of secondary stocks, but it will increase the number of market-based stocks. Before the conversion, investors who hold the basic shares on and off the market will increase the number of shares due to the adjustment of net value after the irregular upward conversion. Before and after the conversion point, the net value of funds held by all share investors is equal.

Irregular upward conversion has no substantial impact on investors holding A shares. Because irregular upward conversion will convert the part with a net share value greater than 1.000 yuan into the basic share, the impact on share A can be understood as regular conversion in advance. It should be noted that, similar to regular share conversion, investors holding A shares will continue to hold the same number of A shares and a small number of basic shares after irregular upward share conversion. Because the tracking target of the basic share is the CSI 800 non-bank financial index, there will be market risk of index fluctuation in this part of the basic share.