Generally speaking, when the net value of the fund share of the graded fund base share is as high as 1.500 yuan or above, the discount will start. However, the folding of graded funds is conducive to the recovery of leverage ratio, and generally speaking, the attractiveness of graded funds B in the market will increase after folding. Because with the rise of the market and net value, the leverage of leveraged funds will change dynamically and decrease continuously. However, through the conversion mechanism, the net value of all kinds of shares of graded funds is 1, and the leverage is restored to the initial high leverage.
If the fund is discounted, it will be forced to reduce its share.
If the graded B net value continues to fall, is it necessary for the A net value to fall? The answer is no, in order to protect the interests of A share holders and avoid excessive leverage of B share net value (the CSRC stipulates that it should not exceed 6 times); Most graded funds have designed an irregular downward conversion mechanism. The treatment method is to trigger downward irregular discount (hereinafter referred to as "downward discount") when the enterprising net value falls to a certain threshold (the threshold set by different products is between 0.2 and 0.3 yuan, mostly 0.25 yuan). The net fund shares of A share, B share and parent fund share will all be adjusted to 1 yuan. After the adjustment, the steady share and the enterprising share will be retained according to the initial proportion, and the rest after the A share and the B share are paired will be converted into the parent fund's on-site share and distributed to the A share investors.
The conversion process is as follows: the net value of B share on T day is less than 0.25 yuan, which triggers the conversion; The parent fund began to close its position at T+ 1, and the net value of B shares on that day was used as the basis for conversion; T+2 shares are suspended and share conversion is completed on the same day; T+3 shares resumed trading, the parent fund opened for redemption, and the conversion process ended.