1. What does the discount of graded funds mean?
Discount of graded funds refers to the practice of grading funds to convert the net value of A and B shares under the parent fund regularly or irregularly 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 completes 1 operation cycle; Some funds switch A and B shares respectively, while others switch parent funds and A shares.
Graded funds usually convert when the net value of the parent fund rises to a certain extent, and publish the conversion information.
2. Why do you fold up and down?
Unlisted funds can only be converted regularly, and listed funds can be converted regularly and irregularly.
Periodic conversion
At this time, the share of B may have exceeded a certain value, such as 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.
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.
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.
What do the above discounts and discounts of graded funds mean? I hope it will help everyone. Warm reminder, financial management is risky and investment needs to be cautious.