The high-risk shares in graded funds are characterized by leverage, not necessarily debt-based, but many are index funds. To put it bluntly, it magnifies the fluctuation of the market. For example, when the stock market goes up 1%, leveraged funds may go up by more than 2%. For example, if the stock market falls 1%, leveraged funds may fall by more than 2%.
leveraged fund
Leveraged fund is a kind of hedge fund. Domestic leveraged funds belong to the leveraged share (also called aggressive share) of graded funds. Graded fund refers to a fund variety with two levels (or multi-levels) of risk-return performance with certain differentiated fund shares through the decomposition of fund income or net assets under a portfolio.
Its main feature is to divide the fund products into two types of shares and give different income distribution respectively. Graded funds are usually divided into two types of shares: low-risk income side (agreed income share) sub-funds and high-risk income side (leveraged share) sub-funds.