Generally, graded foundations correspond to three funds, namely a parent fund, a graded A fund, and a graded B fund.

Grade A: Get a fixed agreed return every year, and the return is reflected in the daily net value of the fund.

So grade A is a low-risk share.

Grade B: After paying the income to Grade A, you can enjoy the rising income of the fund alone or bear the risk of falling fund alone.

So grade B is high risk and high return.

A graded fund is a structured fund. We can understand it as people who hold B shares borrow money from people who hold A shares to speculate in stocks. Since it is borrowing money, people who hold B shares have to borrow money from people who hold B shares every year.

The person who shares A’s share pays the agreed interest.

When the stock market is doing well, needless to say, the trend of Grade B will be extremely good.

But the problem is that the stock market is like the four seasons of the year. There is summer (bull market) and winter (bear market). It cannot be a bull market forever. If the stock market does not rise or goes sideways for three to five years, then the trend of grade B will definitely be

Horrible.

At the same time, even if the performance is poor, those who hold B shares will still have to pay the agreed interest to those who hold A shares.

As for the FOF of graded funds, if there are other similar products, it is best not to invest in the FOF of graded funds.

Because generally speaking, the parent fund fees of tiered funds are relatively high, and at the same time, judging from historical performance, their index tracking effect is not very good (currently, most tiered funds are index funds).

Therefore, unless you are a short-term player, it is best not to choose tiered funds for fixed investment.