The popular explanation of tiered funds is that the assets of share A and share B are invested as a whole, and the holders of share B pay the agreed interest to the holders of share A every year. The overall investment profits and losses are borne by B share. Take a certain financing grading model tiered fund product All remaining assets after principal and accrued income are attributed to B shares, and losses are borne by B share holders to the extent of the net asset value of B shares. When the overall net value of the Fund of Funds falls, the net value of Share B will fall first. Correspondingly, when the overall net value of the Fund of Funds rises, the net value of Share B will appreciate faster after providing the income of Share A. Share B usually obtains a certain degree of leverage by participating in the distribution of residual income or bearing losses to a greater extent. It has a more complex internal capital structure, and its nonlinear income characteristics make it implicit in options. According to the investment nature of hierarchical fund of funds, fund of funds can be divided into hierarchical stock funds (most of which are hierarchical index funds) and hierarchical bond funds. Graded bond funds can be divided into pure debt graded funds, hybrid bond graded funds, and convertible bond graded funds. The difference is that pure debt funds cannot invest in stocks, while hybrid bond funds can invest no more than 20% of their assets in stocks, and convertible bonds Tiered funds invest in convertible bonds. According to the nature of hierarchical sub-funds, Class A shares in the sub-fund can be divided into time-limited Class A agreed-income share funds and perpetual Class A agreed-upon share funds; Class B shares in the sub-fund are also called leveraged funds. Leveraged funds can be divided into stock-type B-type leveraged share funds (most of which are leveraged index funds), bond-type B-type leveraged share funds (leveraged debt bases), inverse leveraged funds, etc.