First, the initial leverage: the initial leverage is the leverage ratio at the time of fund issuance, that is, the ratio of the sum of A share and B share to B share. The specific formula is:
Initial leverage =(A +B)/B.
At present, the proportion of mainstream products in the market is mostly 1: 1 or 4:6, so the initial leverage is 2 or 1.67.
2. Net leverage ratio: The net leverage ratio is the ratio of the net growth rate of the progressive part of the graded fund to the net growth rate of the parent fund. The specific formula is:
Net leverage = total net value of parent fund/total net value of share B.
= (number of shares of parent fund * net value of parent fund)/(number of shares of B * net value of shares of B)
= (parent fund net value /B share net value) * initial leverage
3. Price leverage: it is the change multiple of the B share price relative to the parent fund's net value performance, that is, the total net value of the parent fund divided by the total market value of the B share. The specific formula is:
Price leverage = total net value of parent fund/total market value of share B.
= (number of shares of parent fund * net value of parent fund)/(number of shares of B * price of shares of B)
= (parent fund net value /B share price) * Initial leverage
= net leverage /( 1+ premium rate)