What do you mean by strong capital growth? What are the benefits? What are the new rules for fund public offering?
Compulsory reduction of insufficient shares
Zhu Meimei bought Monetary Fund B last month. At the beginning of this month, the dividend from Fund B went to her account. On that day, she redeemed the fund. Another day later, she received the share of the fund that had been distributed before, only to find that it was "forcibly reduced" by the fund company.
Usually, according to the existing grading fund product model, there is a disassembly mechanism for the leverage end (B) share, that is, once the disassembly point is triggered, the net value of Class B share will be split (reduced) and its net value will be unified. Such a mechanism design mainly considers the following two points:
First, protect Class A shares with the characteristics of stable and fixed expected annualized expected income, and prevent Class A shares from being distributed first and then Class B shares from being distributed according to the agreed expected annualized expected income distribution mechanism under extreme market conditions. Then, if the net value of B returns to zero, the Class A share will suffer extreme losses, and the principal of Class A share and the guarantee of expected annualized expected income will also be lost.
The second is to constrain the leverage ratio of B-side, because once the net value of B-side share is very low (such as 0.25), the leverage ratio of B-side share will be very large, and the smaller the net value of B-side, the greater the leverage ratio, even dozens of times. Perhaps the result of speculative trading is great volatility, even choosing between the daily limit and the daily limit, which is not conducive to market investment and has great speculative risks.
Precautions:
Like money funds or short-term financial bond funds, A/B funds also have different initial subscription amounts. Generally, A funds are 1 000 yuan and B funds are 5 million yuan.
When you accidentally buy a few thousand yuan of Class B, you will be reduced to Class A by the fund company.
There are many situations in which graded funds are forced to increase or decrease, including graded parent funds that you can buy on third-party platforms, which are generally related to the conversion of graded funds.
The resulting share increase or decrease has no effect on the parent fund! The purpose of this is only to restore the original leverage ratio of graded funds (1: 1). Share discount can also help investors to cash in the expected annualized expected returns in time. Low net worth is conducive to promoting purchases, while discount is mainly to protect A-share holders.