What does the discount premium of closed-end funds mean? Because listed on the exchange, the transaction price of closed-end funds is not necessarily equal to their net asset value, but is determined by the balance of market buying and selling forces. When the market price of closed-end fund is higher than its net asset value, the market calls it premium phenomenon; Conversely, when the market price of a closed-end fund is lower than its net asset value, the market calls it a discount phenomenon.

1. premium means that the amount actually paid exceeds the par value or face value of securities or stocks. On the other hand, in the fund, it refers to the value that the transaction price in the closed-end fund market is higher than the net asset value of the fund unit.

2. Discount rate of closed-end funds

When the transaction price of closed-end funds in the secondary market is lower than the actual net value, this situation is called "discount". Discount rate = (unit net share-unit market price)/unit net share. According to this formula, when the discount rate is greater than 0 (that is, the net value is greater than the market price), it is a discount, and when the discount rate is less than 0 (that is, the net value is less than the market price), it is a premium. In addition to investment objectives and management level, discount rate is an important factor in evaluating closed-end funds. Foreign methods to solve the large discount of closed-end funds include: closing to opening, fund liquidation in advance, fund tender offer, fund share repurchase, fund management and distribution, etc.

For example, the market price of a closed-end fund in 0.8 yuan is 1.20 yuan, so we say its discount rate is (0.8-1.20)/1.20 =-33.33%.

Due to the influence of listing on the exchange and the relationship between supply and demand, the transaction price (market price) of closed-end funds is not necessarily equal to their unit net value, but is determined by the balance of market buying and selling power. When the market price of closed-end fund is higher than its unit net value, it is called premium; Conversely, when the market price of a closed-end fund is lower than its unit net value, it is called discount.

Discount rate is a unique index of closed-end funds. When the phenomenon of discount occurs, the discount rate appears. This is because the transaction price of the fund is discounted on the basis of unit net value, and the discounted amount is displayed by the discount rate in the quotation software. The greater the discount rate, the higher the discount degree.

When closed-end funds are converted into open-end funds, the discount of closed-end funds can become the object of investors' attention. When the fund is closed or the closed-end fund expires, the discount of the fund disappears, and the price is set at the unit net value, so investors can earn the difference.