The parent fund of graded index fund is equivalent to ordinary index fund, which can be purchased and redeemed, and can be split into two types of sub-shares for listing and trading without direct trading in the market; A. B shares are directly purchased and redeemed, but they are basically listed transactions (except for Ruifu priority). A. B shares are paired in proportion, usually 1: 1 (there are also 4:6). A shares get the agreed income every year, while B shares not only pay the agreed income of A shares (equivalent to financing costs), but also bear the remaining losses or enjoyment.
In the final analysis, the model of graded index base is that class B shares buy index funds with class A shares in proportion (for example, 1: 1). As Class A shares get the agreed income (usually 6%~7%), and the net value is basically between 1~ 1.07 yuan, Class B shares are subject to market fluctuations, and the unit net value is usually discounted.
Because the proportion of Class A and Class B shares is fixed, the lower the net value of Class B shares, the higher the actual leverage of financing, and vice versa. For investors who invest in leverage, to some extent, they are pursuing leverage multiple. The higher the leverage multiple, the higher the premium they are willing to pay.
From the balance of A and B share discount premium, due to the existence of arbitrage mechanism inside and outside the market, the graded index base as a whole will maintain the net value and price balance inside and outside the market. According to the ratio of 1: 1, Class A shares are often discounted and Class B shares are premium. Assuming that the share of Class A is discounted by 0. 1 yuan, then the share of Class B is premium by 0. 1 yuan. The lower the net value of Class B, the higher the premium rate of 0. 1 yuan.