What does the share conversion of graded funds mean?
There are two main types of graded fund share conversion, regular conversion and irregular conversion, in which regular conversion is equivalent to dividend, and irregular conversion is an act of adjusting the leverage of graded funds.
1 Regular conversion: once a year, which is equivalent to dividends. In general, after conversion, the portion of A share whose net value exceeds the principal at the end of the period (1 yuan) is converted into the corresponding parent fund share in the market and distributed to A share holders, and the converted unit net value is 1 yuan.
2 Irregular transformation:
Fold-up: When the net share of B is high, the leverage is relatively small. At this time, the net value of Grade A and Grade B will be reclassified as 1, and the part with net value exceeding 1 will be converted into the share of the parent fund respectively, so as to realize the callback of leverage.
Discount: When the net value of Class B is below a certain level, the leverage will be relatively large, which will affect the security of A's principal. At this time, the net shares of Grade A and Grade B will be reclassified as 1, and the share of Grade B will be reduced in a certain proportion, while the share corresponding to Grade A will remain unchanged, and the extra share will be converted into the share of the parent fund.
The above is the content of grading fund share conversion. When we invest in graded funds, we mainly pay attention to the discount risk of graded funds in the above-mentioned various share conversions.