Discount formula for graded funds What do you mean by fund discount and fund discount?
Fund discount:
Generally, the trigger condition of discount is the unit net value of the parent fund. In the bull market, when the net value of the parent fund increases, the net value of the B share also increases synchronously, and the ratio of its asset scale to the asset scale of the A share will become larger and larger, and the leverage will become smaller and smaller until it approaches 1 indefinitely, even being ignored. This will obviously lose the charm of B share, and through conversion, each net value will be reunified, and the leverage will be heavier than that of a newly listed graded fund.
Another important significance of the discount is that it provides a channel for B shares to enjoy the expected annualized income of the bull market and withdraw. Generally, the discount threshold is triggered when the parent fund reaches 1.5 yuan or 2 yuan. If calculated according to the share ratio of 1: 1, the net value of the end B will reach 2 yuan or 3 yuan, which is a very rich profit. However, the transaction price may not fully reflect the growth of its net value, and the holder may become rich on paper and cannot obtain the actual expected annualized expected return.
In addition, due to the liquidity of B and other reasons, investors can't sell well in the secondary market and can't realize it, or because of the poor liquidity of A, the channel of merger and redemption with A is not smooth. Look, these exit barriers are real. Folding up provides a new exit method, which enables investors to realize the expected annualized return of most fund shares. Therefore, there is no doubt about the significance of discount in bull market. Because of this, some funds that did not have discount clauses at the time of initial issuance later revised their contracts and set up discount clauses.
How to calculate the discount?
It is assumed that the ratio of radical share to steady share of graded funds is 1: 1, and the expected annualized expected return of steady share is 6%. When the net value of the basic share is greater than or equal to 1.5 yuan, it will trigger the upward-to-point conversion, in which the stable share does not participate in the upward-to-point conversion, the radical share and the basic share are converted according to the net value of the stable share, and the excess share will be converted into a new basic share. After conversion, radical share net value = basic share net value = steady share net value.
The radical share secondary market in the market is mostly in a premium state (premium means that the price of the secondary market is greater than the net value), so the upward point-to-point conversion will bring two effects: the actual leverage of radical share will rise sharply; Radical share Some assets are cashed out in the form of basic share, which will lose a premium.
Assuming that the index does not rise or fall after the point-to-point conversion is triggered, a radical share is purchased in the secondary market at the market price PB before the conversion is triggered. On the day when the point-to-point conversion threshold is triggered, the net value of the basic share is NAV basic, and the net value of the stable share is NAVA, then the net value of the radical share is NAVB=2NAV basic -NAVA. After the conversion is triggered, the radical share will be converted into NAVA with reference to the stable share, and the remaining assets of 2NAV base -2NAVA will be returned to investors in the form of basic share.
The secondary market pricing of sub-shares of graded funds in the market is mainly based on stable shares. Sustainable varieties refer to AA bonds with a maturity of 8- 10 years. At present, the reasonable price in the secondary market is between 0.896-0.952 yuan, corresponding to a stable share of 6%. Assuming that there is no overall discount premium arbitrage opportunity, the reasonable trading price of radical stocks after resumption of trading is between RMB (2NAVA-0.952) and RMB (2NAVA-0.896).
Investors can choose to redeem the (2NAV base -2NAVA) meta-assets converted into basic stocks to realize the expected annualized expected return. Considering the redemption fee of 0.5%, the value is 0.995*(2NAV base -2NAVA) yuan. Through calculation, the price of radical shares before conversion is lower than (1.99NAV base +0.0 1 nav. When the aggressive stock price is higher than (1.99 navbase+0.01nava-0.896), investors who are bearish or bearish on the market can choose to sell before the conversion and buy after the conversion.