In the big concept of fund, you will always hear the words A-level fund and B-level fund. A-level funds and B-level funds are actually the priority of funds and the inferior level of funds. So what's the difference between fund classification A and B? Let's take a look together.

Funds are divided into two categories: A and B, which is how they appear.

In order to meet the different needs of investors, the funds are classified under a portfolio, which forms two levels of risk expected returns, A and B, and its performance has a certain differentiated product share.

A-level funds are suitable for investors with fixed expected returns and low risk tolerance, and often have agreed expected returns; Class B funds are targeted at those investors who expect to increase their investment capital through financing, and then obtain excess expected returns, and have a higher risk expected return preference.

What's the difference between A-level funds and B-level funds?

1. From the perspective of expected income,

A-level foundation has a relatively certain and upper-bound expected rate of return; The B-level fund has no clear expected rate of return target. In the simplest grading fund redemption market, after paying the expected income of A-level funds, the remaining expected income generated by product investment all belongs to B-level.

2. From the perspective of risk.

When the investment loses money, it shall be borne by the B-level fund first. If class B loses completely, it will lose to class A.. Therefore, from the perspective of risk, Grade B represents the highest risk, while Grade A is relatively low risk.

To sum up, in the simplest analysis market, the risk of A-level funds is relatively small, and the expected return is relatively fixed; B-level funds are risky, but the expected returns are also high.

So much for the difference between fund grading A and B, I hope it will help everyone. Warm reminder, financial management is risky and investment needs to be cautious.