Why is it mandatory to reduce the share? Because the graded fund has been discounted.

In order to protect the interests of A share holders and avoid excessive leverage of B share net value (the CSRC stipulates that it shall not exceed 6 times); Most graded funds have designed an irregular downward conversion mechanism. The treatment method is to trigger downward irregular discount (hereinafter referred to as "downward discount") when the enterprising net value falls to a certain threshold (the threshold set by different products is between 0.2 and 0.3 yuan, mostly 0.25 yuan). The net fund shares of A share, B share and parent fund share will all be adjusted to 1 yuan. After the adjustment, the steady share and the enterprising share will be retained according to the initial proportion, and the rest after the A share and the B share are paired will be converted into the parent fund's on-site share and distributed to the A share investors.

To put it simply, it turns out that you have 10000 funds, and the net value of funds is only 0.25 yuan.

Through compulsory reduction, it became a 2500 fund, and its net value recovered to 1.00 yuan. Of course, the actual conversion process is more complicated.

If the parent fund is held, the compulsory reduction only changes the fund share, but does not change the market value of the holding fund. The market value can only change because of the ups and downs.

If the secondary market buys Class B, forcibly reducing the discount may lead to large losses due to high premium.