Through new investments. The circulation of fund shares is listed on the stock exchange, and investors must buy and sell fund shares in the secondary market through securities brokers in the future.
Bidding transaction.
Chinese name closed-end fund discount rate definition of special closed-end discount; Closed-end fund solutions have changed from closed to open.
catalogue
1 definition
Definition of closed-end fund
Definition of discount
Definition of discount rate
Definition of insurance rate
Two examples
3 solutions
4 calculation formula
Discount rate calculation formula
Calculation formula of insurance premium rate
5 discount formation
definition
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Definition of closed-end fund
[ 1]
Definition of discount
When the transaction price of closed-end funds in the secondary market is lower than the actual net value, this situation is called "discount".
Definition of discount rate
The connotation of discount rate refers to the loss of unit market price relative to the net value of fund shares. Therefore, the discount rate of closed-end funds is defined as follows:
The discount rate of closed-end funds refers to the ratio of the difference between the net fund share value and the unit market price of closed-end funds and the net fund share value.
Definition of insurance rate
Premium rate refers to the ratio of the difference between the unit market price and the net value of closed-end fund shares to the net value of fund shares.
example
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For example, the market price of a closed-end fund in 0.8 yuan is 1.20 yuan, so we say its discount rate is (1.20-0.8)/1.20 = 33.33%.
solution
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Foreign methods to solve the large discount of closed-end funds include: closing to opening, fund liquidation in advance, fund tender offer, fund share repurchase, fund management and distribution, etc.
computing formula
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Discount rate calculation formula
Discount rate = (net fund share-unit market price)/net fund share × 100% (1)
According to this formula, we can see that:
(1) The discount rate is greater than 0 (that is, the net value is greater than the market price);
(2) When the discount rate is less than 0 (that is, the net value is less than the market price), it is a premium.
In addition to investment objectives and management level, discount rate is an important factor in evaluating closed-end funds.
Calculation formula of insurance premium rate
Premium rate = (unit market price-net fund share)/net fund share × 100% (2)
Note: (1) When the unit market price is greater than the net value of fund shares, the premium rate is greater than zero, which is called premium;
(2) When the unit market price is less than the net value of fund shares, the premium rate is less than zero, which is called discount.
Discount formation
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Because closed-end funds are listed on the exchange, their buying and selling prices are greatly influenced by the relationship between market supply and demand. When the market supply is less than the demand, the buying and selling price of a fund unit may be higher than that of each fund unit.
Net asset value, when the fund assets owned by investors will increase, it will generate a premium; When the market supply exceeds demand, the fund price may be lower than the net asset value of each fund unit.
In other words, there is a discount. At present, the discount rate of closed-end funds is still high, mostly between 20% and 40%, among which the discount rate of small and medium-sized funds with short term is low. For the same fund, when
However, it is better to buy when the discount rate is high; However, the choice of funds should not only look at the discount rate, but also choose some small and medium-sized funds with moderate discount rate and short term.
According to the experience at home and abroad, it is normal for closed-end funds to discount their trading prices. Discount will affect the investment price of closed-end funds.
Value. In addition to investment objectives and management level, discount rate is an important factor in evaluating closed-end funds, and investors with high discount rate have certain investment opportunities.
Because closed-end funds should be paid or liquidated according to their net value after the operation expires, the higher the discount rate, the greater the potential investment value.