For example, in a falling market, when a graded fund triggers a discount and holds 10000 B funds, the secondary market price may be 0.45, and the net value on the conversion benchmark date is 0.25, so the converted net value is 1 and the share is 2,500, so the conversion may cause greater risks.
The sum of the products of the net value of each sub-fund of the graded fund and the share ratio is equal to the net value of the parent fund. For example, the net share value of the parent fund split into two types of shares = the net share value of the A type sub-base of XA share%+the net share value of the B type sub-base of %+XB share%. If the parent fund is not split, it is a general fund.
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According to the nature of graded sub-funds, class A shares in sub-funds can be divided into class A agreed income share funds with a time limit and class A agreed income share funds with a perpetual period. Class B shares in sub-funds are also called leveraged funds.
Leveraged funds can be divided into stock-type B leveraged share funds (mostly leveraged index funds), bond-type B leveraged share funds (leveraged debt base) and reverse leveraged funds.
Because the volatility of bonds is not as great as that of stocks, such funds will be magnified by the increase of bond prices during the interest rate reduction cycle. Most leveraged debt bases are time-limited, and perpetual leveraged debt bases can be paired with corresponding Class A shares to form a parent fund for redemption.
Baidu encyclopedia-graded fund