"Leverage" is leverage, and the high-risk shares in graded funds have leverage characteristics, which can amplify market fluctuations. 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%.

Leverage refers to the base, that is, the leveraged share of graded funds, usually also called class B share. Ordinary index funds are index funds, which is equivalent to how much money you have invested; Leverage refers to the base, that is, in addition to the principal invested by yourself, you also borrow money from others to invest and form leverage. Graded fund is a structural fund product, which is equivalent to the common index fund share. With the general index fund as the parent fund, it is divided into two sub-shares, one is the priority share, also known as the A share, and the other is the leverage share and the B share. Regardless of the rise and fall of the parent fund, the priority share gets the agreed expected annualized expected return, and the leverage share bears the residual loss or enjoys the residual expected annualized expected return.

Investment threshold of leveraged funds

For ordinary investors, leverage refers to the lowest threshold tool for obtaining leverage in the securities market. Generally, the price of the leveraged finger base is between 0.3 yuan and 1.6 yuan, and the minimum trading threshold is 100, which means that the leveraged finger base can invest in 200 yuan.

Risks of leveraged funds

Although the leverage index is a good tool for Bo's rebound, when the market falls, it will also face the risk of rapid and sharp decline. For example, in July last year, Shenwan's enterprising leverage base was reduced to 0.28 1 yuan, and the initial face value of the fund was 1 yuan.

Secondly, after the leverage index rises rapidly, the premium rate is often too high, and it is easy to face the risk of falling premiums. Changes in the bond market will affect the pricing of preferred shares and the premium and price of leveraged shares.

Third, due to the market decline, the leverage ratio of the leverage share is constantly improving. In extreme cases, high leverage will trigger the downward irregular conversion mechanism, resulting in the reduction of the multiple of high leverage to the initial low leverage.