During the fund investment process, some investors will receive notices such as fund reductions and withdrawals of expected annualized returns. If you are confused by these news, then learn about the forced adjustments in the fund. What does minus mean?

What are the online and offline channels in the fund? How to prevent conflicts of interest in funds?

What does the forced reduction in the fund mean?

In accordance with the existing hierarchical fund product model, there is a split-down mechanism for the leveraged side (B) shares, which means that once the net value of the B-class shares triggers the split-down point, they will be split ( shrink) and normalize its net value. The design of such a mechanism mainly takes into account the following two points:

First, to protect Class A shares with stable and fixed expected annualized expected return characteristics, so as to prevent the market from being deducted according to the agreed expected annual return in the event of extreme market conditions. The expected income distribution mechanism is to first allocate the principal and expected annualized income of Class A shares and then allocate Class B shares. Then if the net value of B returns to zero, there will be extreme losses to the A shares, and the principal of the class A shares will be lost. Protection of deposits and expected annualized expected returns.

The second is to constrain the leverage ratio of the B-side share, because once the net value of the B-side share is very low (such as 0.25), the B-side share leverage ratio will be very large, and as the B-side net value becomes smaller , the larger the leverage ratio is, even to dozens of times, the result of speculative trading may be great volatility, and you may even have to choose between the upper limit and the lower limit, which is not conducive to market investment and carries great speculative risks.

Related reports:

Seeing the details of Ms. Wan’s fund account, Ms. Wan purchased 18,000 shares of Boshi Cash on November 8 and expected annualized earnings were received on December 2. 56.44 fund dividends were distributed, and the fund company confirmed Ms. Wan’s redemption application on that day; Ms. Wan’s account received 18,059.1 yuan on December 3. On the 3rd, the previous 56.44 fund dividends showed a forced reduction.

Ms. Wan believes that the 59.1 yuan received is the expected annualized return of these 18,000 funds, while the 56.44 yuan received previously is additional dividends. On December 2, the account also showed that she held There were 56.44 funds, but they "disappeared" on the 3rd.

I learned from the customer service department of Boshi Fund that the above-mentioned forced reduction by Ms. Wan is normal. The customer service staff said that what Ms. Wan purchased was a currency fund. Their company stipulated that when the fund share falls below 100 shares, it will be forcibly reduced, which is called forced redemption. In addition, the net value of the monetary fund remains unchanged at 1 yuan, but the shares have changed. Ms. Wan has held the fund for more than one month, so part of the expected annualized expected income is transferred to her account in the form of dividends, and the other part is expected to be annualized. The expected income will be transferred to her account on a daily basis. Her total expected annualized expected income is 59.1 yuan, which has been transferred to her account.