The graded fund is a kind of complicated fund. In the process of understanding the graded fund, many investors find it difficult to understand the content of share conversion. So what does the graded fund share conversion mean?

what does the conversion of graded fund shares mean?

fund share conversion refers to adjusting the total fund share according to a certain proportion under the premise that the net asset value of the fund remains unchanged, so that the net asset value of the fund unit decreases accordingly.

graded funds can be converted into discount and discount. As we all know, the graded premium is divided into two shares, A and B. B uses A's funds to expand the leverage. When the market loses money, B's funds will be lost first. If B's net value decreases, the leverage will become larger, which is unsafe for A. If B's net value is too high, the leverage will be too small. The former should be folded down and the latter should be folded up.

1 graded fund discount: if the net value of B decreases, the leverage will become larger, which is unsafe for A. Therefore, the share of B will be merged to increase the net value of the unit, and a part of A's share will be distributed to investors, thus reducing the leverage.

2 fold up: if the net value of B is too high, the leverage will be too small. In order to improve the leverage, Grade B will be split to reduce the net value. After the share split, a part of the share will be added, and the extra share will be distributed to the holders of Grade B shares in the form of dividends.

The above is about the discount of graded funds. I hope it will help you.