There are different words in the process of fund investment. Only by understanding the real meaning can we make better investment. What is the forced redemption of funds? What should I do if I am forced to redeem?

what do you mean by compulsory fund reduction? What's the impact? What is the turnover rate of the fund? How to calculate?

what is mandatory fund redemption?

forced redemption refers to the forced redemption of fund shares held by investors by managers or fund registrars according to established business rules without investors applying for redemption. Compulsory redemption clause is one of the terms in the preferred stock agreement, which requires enterprises to redeem their shares from private equity investors according to certain arrangements, and is usually used in redeemable preferred stock investment.

Compulsory redemption mainly refers to the following two situations:

(1) When an investor redeems, when a certain redemption results in less than 5 fund units in the trading account of the consignment agency, the balance must be redeemed together;

(2) If the investor's account balance in the consignment agency is less than 5 due to other reasons (such as re-custody, non-transaction transfer, etc.), it is allowed to redeem less than 5 shares, but it must also be redeemed at one time.

Compulsory redemption fee for money funds:

According to the Regulations, when the cash, treasury bonds or highly liquid assets due within five trading days account for less than 5% of the fund assets and the deviation is negative, a 1% extra redemption fee shall be levied on the application of a single fund share holder for redemption of the fund shares that account for more than 1% in a single day, and this fee will also be included in the fund assets.

the deviation of goods base mentioned in it often refers to the deviation between the net asset value of the fund and the market value of the assets actually held. However, because the goods-based assets are included in the held maturity account, and this account is measured by amortized cost method, there is a certain deviation from the actual asset price brought about by the daily risk-free expected annualized interest rate fluctuation.

Investment tip:

If there is any problem with the operation of the fund manager, you should not hesitate to redeem it. As we all know, due to the different interests pursued by fund managers and holders, it will inevitably lead to the "moral hazard" problem of fund managers. If an investor finds that the fund he has invested in is used by the manager as a tool to transfer benefits, in other words, the manager should sell the fund immediately in order to seek benefits for a specific person and sacrifice the rights and interests of investors, and there is no need to place any expectations on it.

All redemption is to fill in the available share. After all redemption funds arrive, you can cancel the original bank card. After cancellation, you don't need to open a fund account at other bank outlets (because your fund account has not been cancelled). You just need to bring your Fund Account Voucher and ID card to the counter of other banks to directly apply for a new trading account and then purchase.