The market's shock adjustment is mainly affected by several major negative factors, and deleveraging is one of them. In the bull market, the leverage effect of tiered funds is amplified and their earning power is highlighted. However, the stock market plummeted and tiered funds also suffered heavy losses. Tiered funds have obvious "deleveraging" characteristics. Many investors do not know what deleveraging is for tiered funds. Meaning, this article will explain it.

When the market enters a period of adjustment, if the fund's price leverage does not outperform its net value leverage, the transaction price may fall. The sharp fall in graded funds was affected by this.

Leverage and activity coefficient: different aspects, different portrayals

We focus on three types of leverage, the first is the average net worth leverage, the second is the average price leverage, and the third is the current price leverage. Specifically The calculation formula is detailed in the appendix of this article. The so-called "average" in the quarterly strategy report refers to the average level in the first quarter. Among these three types of leverage, investors who only hold sub-funds cannot redeem according to the net value. Therefore, we focus on the average price leverage and current price leverage. The average price leverage is also called the actual price leverage. Its level indicates the market's pursuit of it. For example, the average price leverage within a period of time deviates significantly from the average level, and even breaks away from the constraints of the overall discount and premium to generate an overall premium. At this time, the fund's rise is not only related to the increase in the net value of the parent fund or the increase in the underlying index, but also to market sentiment, investors' views on the market outlook, market sentiment and even hot money speculation.

In other words, there are two factors that affect the average price leverage. One is the net value factor, or internal factor, that is, the relationship between the sub-fund, the parent fund and the share leverage; the second is the non-net value factor, or external factor. in factors. The current price leverage is determined based on the comparison of the net value of the parent fund and the sub-fund and the share ratio. It has a certain degree of stability. Its significance lies in the value of theoretical leverage and indicates the fluctuation range of future market prices relative to the parent fund.

In order to characterize whether a fund's actual leverage can outperform its theoretical leverage, we introduce the concept of "activity coefficient", which is the ratio of actual leverage to theoretical leverage (both price leverage). When the ratio is less than 1, it indicates that the actual leverage is less than the theoretical leverage and the market is inactive. When the ratio is greater than 1, the opposite is true. If the activity of all equity leveraged funds we count is less than 1, then it shows obvious "deleveraging" characteristics. Is this a periodic accidental phenomenon, or has hierarchical funds entered a development dilemma and bottleneck? The reasons are complex and require in-depth and multi-faceted discussions, but they should be clearly related to the following factors:

In a consolidation market, the leverage effect has no advantage; secondly, as the net value of the fund With the increase, the leverage level will inevitably decrease, which to a large extent reduces the attractiveness of leveraged funds and makes it difficult to attract investors. Not only will there not be a hot scene of sustained overall premium, but the actual leverage will not even outperform the theoretical leverage. Third, the stable share has historically changed from a full discount to a premium, causing the aggressive share to undergo a "painful transformation", that is, from a premium to a discount. In the process of this change, some of the gains in the secondary market will inevitably be eaten up.