Generally speaking, the fluctuation of the fund's net value will not be particularly large, but sometimes there will be an abnormal surge, and the huge redemption of the fund will lead to the surge of the fund's net value.

What is the huge redemption fund? How much is the huge redemption? What other influences does the fund have on the foundation?

Let's first understand the redemption of the fund.

Fund redemption refers to the behavior of fund share holders asking fund managers to buy back their open-end fund shares. Simply put, it is to sell the fund in your hand.

The redemption of the Fund requires a valid redemption application submitted before 1 1: 30 in the morning and 13: 00 to 15:00 in the afternoon on the trading day when the Fund is normally open, generally from Monday to Friday after holidays.

Redemption of the foundation generates redemption fees. The redemption fee belongs to the fund assets after deducting the handling fee.

Who designed the rate standard of redemption fee step by step? In other words, the redemption rate decreases with the increase of holding time, and even the redemption fee is waived after holding for a certain period of time.

The specific charging standard of redemption fee can refer to the fund contract.

Huge fund redemption refers to the huge redemption when the net redemption application of a single open day exceeds 10% of the total fund share.

The net redemption application for a single open day includes the fund redemption application and the transfer-out application during the fund conversion period. Subtract the balance after applying for subscription to the Fund and applying for transfer out of the Fund from the fund conversion on that day.

The influence of huge redemption on the fund

If there is a huge redemption of the fund, a large amount of expenses will be deducted due to large-scale redemption. According to the provisions of the fund contract, part of the redemption fee will be included in the fund assets, which will lead to an increase in the net value of the fund.

The huge redemption of the fund may also lead to the abnormal rounding of the net value of the fund, because the net value of the fund is kept to the fourth place after the decimal point, and then rounded, which will be affected in the event of huge redemption.

There is also a situation where the market rises or falls when the fund is redeemed, which will also lead to a rise or fall in the net value.

Therefore, for us ordinary investors, the huge redemption of the fund is not necessarily to make money or lose money.

How do managers deal with huge redemption?

When there is a huge redemption of the fund, the fund manager will take corresponding measures to maintain the stability of the fund.

There are generally three ways to deal with it. The first way is full redemption. When the fund manager thinks that he has great ability to pay the investor's redemption application, he will follow the normal redemption procedure.

Second, partial deferred redemption: the fund manager will postpone the remaining redemption application on the premise of not less than 10% of the total fund share of the previous day.

In addition to huge redemption funds, there are also the concepts of compulsory redemption and continuous redemption, which can be understood together.

Forced Redemption: This is the situation that the manager or fund registration institution forcibly redeems the fund shares held by investors according to the established business rules, and it is the premise that no investors apply for redemption.

When an investor redeems, when a certain redemption causes the balance of his fund share in the trading account of the consignment agency to be less than the minimum holding share, or when the balance of his account in the consignment agency is less than the minimum holding share for other reasons, the account balance must be redeemed together, and both cases will be forced to redeem.

Continuous redemption: In case of huge redemption, investors will choose to redeem the deferred redemption application in turn on the next fund open day.

Therefore, continuous redemption is mainly aimed at huge redemption of large funds.

I hope the above contents are helpful to you.