Definition of tiered funds: A tiered fund is a product that uses the decomposition of assets to achieve different income risks by separating A-B or multi-level income risks, or a structured product that forms A-B or multi-level gambling.

Elements of graded funds: parent fund, agreed return A, financing leverage B. Depending on whether the above three elements are separated or not, pairing conversion will occur, and various arbitrage opportunities will arise from the market environment. Including overall discount and premium arbitrage, high or low discount arbitrage, etc.

Methods for participating in graded funds:

(1) off-site and on-site subscription and then split,

(2) secondary market trading.

Classification of hierarchical funds:

(1): Asset attributes of parent funds: bond type, stock type.

(2): Product life cycle: limited, sustainable.

(3): Product operation mode: open, closed.

(4): Product tracking: active punishment, passive type.

Grading model:

(1) Fully financing type, most grading models in China.

(2) Long-short betting type, betting between A and B.

(3): Convertible bond type, the agreed income period is based on the net increase of the parent fund to obtain the bottom line of capital preservation or additional returns.

(4): Profit graded type, stage leverage.

Advantages of tiered funds:

In one product, long-term low-risk A-level and high-risk B-level are derived, as well as medium-risk C-level with the parent fund as the index. Plus various arbitrage opportunities derived from it. Effectively meet the participation of all types of risk preferences.