Fund selling is also called redemption, and you may encounter large redemption at that time, which has a great impact on the fund. The following small series has compiled some articles about the significance of huge redemption funds, hoping to help you!

What does the huge fund redemption mean?

The huge redemption of the fund means that the net redemption amount of the open-end fund on that day exceeds 10% of the fund size, in which the net redemption application for a single open day refers to the sum of the redemption application of the fund plus the transfer-out application of the fund when the fund is converted, and the balance after deducting the sum of the subscription application of the fund and the transfer-in application of the fund when the fund is converted.

Faced with this situation, the fund manager can postpone the remaining redemption application or accept full redemption on the premise that the proportion of redemption accepted on the same day is not less than 10% of the total fund share of the previous day, that is, when the fund manager thinks that he has the ability to pay the investor's full redemption application, he will follow the normal redemption procedure.

Investors can choose two ways: continuous redemption or cancellation of redemption. Continuous redemption means that investors choose to redeem the deferred redemption application on the next fund open day in turn.

Most of the huge redemptions occurred in the fund, which means that the net redemption amount of the fund on that day far exceeded the fund's affordability, so if we redeem it later, we won't get the redemption funds in a short time. In the face of redemption, fund managers will sell positions or other financial assets in large quantities to deal with redemption, and we can wait appropriately.

Interpretation of large fund redemption;

In fact, the large redemption of 1 fund has nothing to do with individuals, because it is impossible for each of us to buy 10% of a fund at a time, let alone redeem 10 billion at a time, which is often the operation of the fund manager.

The large redemption of the fund does not mean anything, but the management fee, custody fee and redemption fee of the fund will be deducted from the net value of the fund. When a large amount of redemption occurs, the net value will decrease after deducting a certain percentage of management fees and redemption fees.

3. The substantial redemption of the fund will also lead to the continuous decline of the stock market, further aggravating the decline of the net value of the fund, and further stimulating the redemption will of the fund holders, thus forming a vicious circle.

Influence of large redemption of funds:

1 will lead to an increase in net value, and there will be corresponding expenses for fund redemption. Large-scale redemption will deduct a lot of expenses. According to the provisions of the fund contract, part of the fund redemption fee will be merged into the fund assets, resulting in an increase in the net value.

2. The net assets of the fund decreased, resulting in huge redemption. The net assets of the fund decreased the next day, and the market fluctuated greatly, resulting in passive fluctuations in the net assets of the fund.

③ In case of huge redemption, the net value of the fund is retained due to rounding, and the resulting gains or losses are borne by the fund assets. The general fund net value is retained to the fourth place after the decimal point. If the proportion is small, this figure is accurate enough. However, if there is a huge redemption, an abnormal situation may occur.