Fund splitting is a common operation, which aims to improve the liquidity and market transparency of funds and provide investors with more choices and flexibility. When the market value of the fund increases significantly, resulting in the high price of a single share, the fund company may consider splitting. After the split, the price per share will be reduced accordingly, allowing more investors to enter the market.
After the split, the number of fund shares increases, and investors can choose to buy smaller shares according to their own needs, thus achieving a more refined fund allocation. This is especially important for small investors, who can buy a small part of funds with less money, lower the investment threshold and increase their participation.
Capital splitting also helps to improve market liquidity. When the fund share price is high, investors may be reluctant to sell, thus reducing the trading activity of the market. Through the split, the fund share price will be reduced, so that more investors can participate in the transaction and improve the liquidity of the market.
Another purpose of fund splitting and merging is to enhance market transparency. The split fund shares are more comparable, which is convenient for investors to compare and choose. When a fund company splits or merges, it usually issues an announcement detailing the reasons, proportion and time of the split or merger, which increases the transparency of the market and enables investors to better understand the operation of the fund.
The process of splitting and merging is relatively simple, and the fund company will calculate according to the established ratio and adjust the corresponding fund share. Investors still hold the original shares without additional operation. Split and merger will not have a direct impact on the interests of investors, but will only change the number of shares and the price of a single share.
The split and merger of funds is a common operation, which aims to improve the liquidity and market transparency of funds and provide investors with more choices and flexibility. It helps to lower the investment threshold, improve market liquidity and enhance market transparency. Investors should pay attention to the information of split and merger when choosing funds, so as to make more wise investment decisions.