Fund classification refers to dividing the same fund product issued by the same fund company into different shares according to different risk-return grades, so that investors can choose the corresponding shares to invest according to their own risk preferences and investment objectives. The classification of AC funds is based on risk rating, in which Class A is higher risk and higher return, and Class C is lower risk and lower return. Compared with ordinary funds, the investment threshold of fund grading AC is lower, and investors can flexibly choose different risk levels to invest, which meets the actual needs of retail investors.

Another advantage of fund grading AC is that it can realize the dynamic allocation of funds through upgrading. Once the market environment changes or the performance of the fund is not satisfactory, the fund manager can downgrade the fund by withdrawing assets impairment reserve or adjusting the investment portfolio. On the other hand, the fund manager can also improve the fund by improving the performance or adjusting the investment strategy, so as to improve the holding income of investors.

However, there are also some shortcomings and risks in fund grading AC. First of all, the cost of fund grading AC is higher than that of ordinary funds, and the management fee and sales service fee are higher. Secondly, the transaction scale of fund grading AC is small and its liquidity is relatively poor. If the market changes greatly or the investment decisions of fund managers deviate, the value of fund shares may drop rapidly. Therefore, investors should carefully evaluate their risk tolerance and investment objectives and invest cautiously when choosing fund grading AC.