analyzing the influence of funds on split

fund share split is a marketing method played by the fund industry very early. In fact, in November last year, a number of ETFs implemented share splitting. So how do we novices understand the split of fund shares? Today, Xiaobian will share with you the impact of the fund on the split, for your reference only!

fund split, also known as split fund, refers to a way to change the corresponding relationship between the net fund share and the total fund share and recalculate the fund assets under the premise of keeping the total assets of fund investors unchanged. After the fund is split, the original investment portfolio remains unchanged, the fund manager remains unchanged, the fund share increases, and the net value of unit share decreases. The split of fund shares can reduce the net value of fund shares by directly adjusting the number of fund shares, without affecting the realized gains, unrealized gains and paid-in funds of the fund.

what is a fund split?

fund split refers to a way to recalculate the assets of the fund under the premise of keeping the assets of the fund holders unchanged.

For example, there are 5 apples with a total value of 1 yuan, and the unit price is 2 yuan. We break 5 apples into 1, and the unit price of each apple becomes 1 yuan, while the total value remains unchanged in 1 yuan.

The same is true for changing Apple into a fund: for example, if I hold 1, shares of A fund and the net value of the fund unit is 2 yuan, then the fund assets I hold are 2, yuan.

if the fund is split in proportion, the unit net value of the fund will become 1 yuan, and the fund share I hold will become 2,, and the total assets will still be 2, yuan.

after the fund is split, it will not affect the portfolio, fund manager and realized income of the fund. What has changed is that the fund share has increased, while the net value of the fund unit has decreased.

Simply put, it is to reduce the net value of the fund by increasing the number of fund shares.

what are the reasons for the fund split?

which would you choose, buying 1 funds with unit price in 1 yuan with 1 yuan or buying 5 funds with unit price in 2 yuan with 1 yuan?

in the fund market, it is not difficult to find that many people like to invest in the form of "price comparison": once the net value of a fund is raised too high, some people think it is "expensive"; Funds with lower net worth, feeling "cheap", began to be sought after.

because many investors think that under the same investment, the higher the net value of the fund, the less the share of the subscription, and thus the higher the risk, so they give up the high net value fund and choose a cheaper fund. (But buying a fund is really not buying an apple. High net worth doesn't mean expensive! )

this has led to some old funds with relatively excellent performance, and because of their high net worth, they have fallen into a situation of applauding and not being a seat. Under such market competition, the birth of fund split is ushered in.

Through the fund split, the net value can be accurately readjusted to 1 yuan, thus reducing the price sensitivity of investors, meeting their psychological needs, facilitating the fund's continuous marketing and attracting more investors.

Therefore, the essence of fund splitting is to lower the trading threshold of investors, lower the net value of high-net-worth funds and reduce investors' fear of heights. More conducive to sales and scale growth.

what is the impact of fund splitting?

for fund companies, fund splitting can 1) reduce investors' sensitivity to price, which is conducive to the continuous marketing of funds; 2) The essence is to stabilize and expand the scale of the fund.

so it is not difficult to understand why the fund company chooses to split the fund under the continuous callback of the military fund.

We also know a way to lower the net value of funds-fund dividends. However, fund splitting is completely different from dividend. Dividend refers to that the fund manager distributes part of the fund income to fund investors in the form of cash or fund shares, and needs to sell stocks to get cash. After dividend, the net value of the fund decreases and the scale decreases accordingly.

however, the split of the fund does not require dividends, that is, the adjustment of the net value to cater to investors' preference for low net worth.

But let's look behind it. The split of funds is actually a marketing tool. The profitability of a fund has nothing to do with its net worth.

The net value of the fund is different from the price of Apple's commodities. The fund holds a basket of stocks and bonds, and its net value fluctuates with the rise and fall of the investment. The investment ability of the fund manager is the decisive factor.

It doesn't mean that high-net-worth funds will not go up, but low-net-worth funds will go up quickly!

Generally speaking, fund splitting can reduce investors' sensitivity to price, which is beneficial to the continuous marketing of funds, but it will not affect our actual interests; But don't just look at the net value to buy a fund, which is not an inevitable factor to determine the value of the fund.

what are the advantages of fund splitting?

fund splitting can accurately adjust the net value of fund shares to 1 yuan, but it is difficult to accurately adjust the net value of fund shares to 1 yuan with a large proportion of dividends.

in addition, in order to achieve a large proportion of dividends, it is possible to forcibly sell some stocks and turn unrealized gains into realized gains in a short period of time, which may harm the interests of investors and make them lose investment opportunities.

the split may not affect the realized income, unrealized income, paid-in fund and other accounting subjects and their proportional relationship, and has no substantial adverse impact on the rights and interests of investors.

tip: suppose an investor holds 1, funds A, and the current net fund share value is 1.6 yuan, and its corresponding fund assets are 1.6× 1, = 16, yuan. After splitting the fund according to the ratio of 1: 1.6, the net value of the fund becomes 1. yuan, while the fund share held by investors changes from 1, to 1,× 1.6 = 16,, and the corresponding fund assets are still 1.× 16, = 16, yuan. The asset scale will not change.

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