A hierarchical fund is a structured fund that divides fund shares into two types of fund (sub-fund) shares with different expected returns and risks through the arrangement of fund (parent fund) income distribution, and lists one or two types of shares for trading. Securities Investment Funds. Generally speaking, among the two types of shares divided by the basic shares of the fund, one is the part with lower expected risks and returns and enjoys priority in income distribution, which is called "Class A shares", and the other is the portion with even expected risks and returns. The higher and second-priority portion of the income is called "Class B share". Similar to other structured products, Class B shares generally "borrow" funds from Class A shares to amplify returns, and have certain "leverage characteristics." It is precisely because of "borrowing" funds that Class B shares will generally pay A certain basis of “interest” for Class A shares. Conservative sub-funds have low risks and low returns. Radical sub-funds are expected to have high returns and high risks. After the fund is established, the two types of shares will be merged and operated. The distribution ratio of income is different and is chosen by investors. Category A is suitable for investors who prefer low risk, and Category B is suitable for investors who prefer high risk and high returns. If the situation is good and the operation is good, the conservative sub-fund must transfer benefits to the radical sub-fund; if the situation is bad and the operation is not good, the radical sub-fund must also ensure the basic income of the conservative sub-fund. \x0d\ Take the Changsheng Tongqing Separable Trading Fund as an example to explain: After the issuance, Changsheng Tongqing will split the fund shares held by investors into Tongqing A and Tongqing B in a ratio of 4:6. Some shares are listed and traded separately. In terms of income distribution, Tongqing A can first receive the distributed principal and a fixed annual interest rate of 5.6%. After ensuring the principal and income of Class A shares, Tongqing B will fully share the income of the entire fund assets at the end of the three-year period (or loss). \x0d\ Take the Ruifu Innovation Graded Fund as an example: Ruifu Innovation Fund consists of two parts: "Ruifu Priority" and "Ruifu Enterprising". Ruifu Priority mainly faces investors with lower risk appetite, while Ruifu Priority mainly faces investors with lower risk appetite, while Ruifu Innovation Fund Aggressive is primarily aimed at investors with a high risk appetite. When distributing income, Ruifu Priority will first be distributed according to its base income. If there is any remainder after meeting Ruifu Priority's base income, the remaining portion will be distributed jointly by Ruifu Priority and Ruifu Enterprising***. The ratio is 1:9. This design not only ensures that Ruifu Priority can obtain relatively guaranteed returns, but also provides the possibility of excess returns for Ruifu Aggressive investors who are willing to take more risks. Ruifu Aggressive fell miserably during the crash, while Ruifu Aggressive fell miserably. Fu first is very stable. When there is a big rise, Ruifu Aggressive will have a large increase, while Ruifu Priority will have a smaller increase. The use of grading technology allows one fund to be decomposed into two fund products with completely different styles. Therefore, investing in Ruifu Aggressive may result in double returns, but there are also double risks. \x0d\ The so-called "leverage" of graded funds is difficult for ordinary investors to understand. It seems that there is no need to spend a lot of energy on the terminology, as long as they can understand its effect on returns. Roughly speaking, the meaning of "leverage" can be understood as that Class B shares can "borrow" funds from Class A shares to amplify returns. \x0d\The so-called "leverage multiple" refers to the ratio of the return rate of a share with built-in leverage characteristics to the net return rate of the fund share. The share ratio of Level A and B is the most important factor affecting the leverage ratio. The higher the share ratio, the higher the leverage ratio. The higher the proportion of A-class shares, the fewer B-class shares will enjoy the fund's rising income or bear the falling losses. The greater the change in its net return rate, and the higher the leverage ratio. At present, tiered funds on the market mainly allocate shares according to the ratio of 4:6 or 1:1. The highest leverage multiple of Class B shares in the 4:6 ratio can reach 1.67, and the highest leverage multiple of Class B shares in the 1:1 ratio can reach 1.67. 2. \x0d\ When investing in graded funds, you should pay attention to the following points: \x0d\ The low-risk part (category A) of graded funds generally has an agreed rate of return, for example, the stock-type Tongqing A has an agreed annual base rate of return of 5.6%,\x0d\ x0d\At the end of the closed period, when the net value of the overall Tongqing Fund is higher than 1.6 yuan, 10% of the portion higher than 1.6 will be allocated to Tongqing A. When the overall net worth of Tongqing fell below 0.4 yuan, Tongqing A began to suffer principal losses. Tongqing B enjoys all the income after the benchmark income distribution and 90% of the income exceeding 1.6 yuan. When the overall net value of Xingye Herun Fund is lower than or equal to 1.21 yuan, Herun A maintains its face value of 1 yuan, and Herun B obtains residual income or bears all losses; when the overall net value of Herun Fund is higher than 1.21 yuan, Herun A and Herun Herun B shares and Herun Fund shares enjoy the same share net value growth rate; when the net value of Herun tiered fund shares is not higher than 0.5 yuan, the operation period will end early for liquidation, and Class A will enjoy the principal. Ruihe 300: When the net value of Ruihe 300 shares is less than 1, the net value of Xiaokang and Yuanyan is equal to the net value of Ruihe. When the net worth growth rate is within 10%, the income portion will be divided between Xiaokang and Vision at a rate of 8:2. When the net worth growth rate exceeds 10%, Xiaokang and Vision will share the income above 10% at a rate of 2:8. Ruifu grading: Ruifu Priority's annual base rate of return is the 1-year bank time deposit interest rate + 3%. The remainder exceeding Ruifu Priority's benchmark income distribution will be shared by Ruifu Priority and Ruifu Aggressive in a ratio of 1:9*** Participate in distribution. Yinhua Shenzhen 100: The agreed annual base rate of return for Yinhua Wenjin’s shares is the 1-year bank time deposit interest rate (after tax) for the same period + 3%.