Irregular conversion, also known as point-to-point conversion, is a clause for graded funds to ensure the vitality of aggressive share (B share) and limit the risk of priority share (A share). Irregular conversion can be divided into upward conversion and downward conversion, which are referred to as upward conversion and downward conversion for short.
reduction ascending
Upconversion is a form of irregular conversion. When the net value of the parent fund (basic share) of the graded fund rises to a certain price (see the fund prospectus for details), the graded fund will be converted upwards. Therefore, under normal circumstances, the discount of graded funds generally occurs in a bull market. In the bull market, the net value of the parent fund and the net value of the B share will increase substantially, and the leverage ratio will decrease. Therefore, in order to keep the leverage at a reasonable level, fund companies take upward conversion operation to restore the low leverage ratio in the bull market to the initial level. After the discount, the net value of share B will drop to 1, and at the same time, the net value of share A will return to 1.
There are two ways to discount stock grading funds:
The net value of 1, the parent fund and A and B shares all returned to 1 yuan.
We assume that investors hold 65,438+00,000 shares of the parent fund and A and B on the conversion base date, and the net values before conversion are 65,438+0.3, 65,438+0.65, 438+0 and 65,438+0.5 respectively. Then, after the conversion:
1. The original net value of 10000 parent funds in 3 yuan is converted into1yuan 13000 parent fund shares.
The original net value is 0 yuan 1.65438+ 10000 A shares, and after conversion, it is 0 yuan 65438+ 10000 A shares and 0 yuan parent fund 1000.
The original net value 1.5 yuan's 10000 B shares are converted into 1 0000 B shares of 1 yuan and 5000 B shares of1yuan.
2. The net value of the parent fund and A and B shares is converted into the reference net value of A shares. ..
We assume that investors hold 65,438+00,000 shares of the parent fund and A and B on the conversion base date, and the net values before conversion are 65,438+0.3, 65,438+0.65,438+0,65,438+0.5 respectively. Then, after the conversion:
Convert the original net value of 65438+ 10000 parent funds in 0.3 yuan into1.65438+118 parent funds in 0 yuan.
The original net value was 0 yuan 1.65438+ 10000 A shares, and the converted share and net value remained unchanged.
0.5 yuan's original net value of 65438+ 10000 b shares was converted into 0 yuan's 1.65438+ 10000 b shares and 0 yuan's 1.65438+3636 parent fund shares.
Downconversion
When the net value of B shares falls to a certain price, the graded funds will be discounted downwards, which usually happens in a bear market. Share b borrows from share a, and it needs to pay interest to share a every year. In order to protect the interests of A-share investors, a discount will be made. After the discount, the net value of A and B shares will return to 1 yuan, but the investors of A shares will get the shares of the parent fund, while the investors of B shares will decrease accordingly.
We assume that investors hold 65,438+00,000 shares of the parent fund and A and B on the conversion base date, and the net values before conversion are 0.9, 65,438+0.65, 438+0 and 0.6 respectively. Then, after the conversion:
B The net share value is adjusted to 65,438+0 yuan, and the number of shares = net value before conversion x net value before conversion/net value after conversion = 6,000.
The net value of share A is adjusted to 65,438+0 yuan. In order to restore the ratio with the converted share B to 65,438+0: 65,438+0, 6,000 shares A are converted, and the remaining total net value is 65,438+0.65,438+0x65,438+00000-6000 = 5000 yuan.
The net value of the parent fund is adjusted to 1 yuan, and the number of shares = 9000+5000(A share surplus is converted into 5000 shares of the parent fund according to 1 yuan) = 14000 shares.