With the development of the Internet, we have more and more channels to invest funds. The advantage of funds lies in portfolio investment, which can spread risks, so it is attractive in various wealth management products. Many investors who are new to the fund still don't understand the fund, so what is the split and merger of the fund?

What is the split and merger of funds?

Fund splitting is to expand the fund share according to a certain proportion, while the net value of fund units decreases according to the same proportion; Capital integration is the opposite. In the investment of graded funds, splitting refers to the behavior of the holders of graded fund shares to convert their applied parent fund shares into a certain proportion of sub-fund shares; Merger refers to the behavior of fund share holders to convert a certain proportion of their applied sub-fund shares into parent fund shares.

Why should the fund be split and merged?

For the division of funds. According to the fund company's explanation, fund splitting can reduce investors' sensitivity to price, which is beneficial to the fund's continuous marketing. Simply put, it is to lower the threshold for opening an account by lowering the net value of the fund unit.

On the contrary, the reason for the merger of funds is that the net value of fund units is too low. In the investment of graded funds, if the unit net value of B share is too low, then the leverage will increase. In order to avoid risks, it is necessary to improve the unit net value by merging shares, and adjust share A accordingly to reduce investment leverage.