Fund share conversion is a way to deal with the fund's net value. In the process of fund operation, the foundation will undergo regular or irregular conversions. So why does the fund conversion occur?

Did the fund lose money?

Why does fund conversion happen? Funds that are not listed for trading can only be converted regularly, while listed funds can be converted regularly and irregularly.

1. Regular conversion: At this time, B's share may have exceeded a value of 1 or 2, and the fund company decides on fund dividends.

Only irregular discounts will be carried out, and the purpose of the upward discount at this time is to restore the high leverage characteristics of the fund.

No matter what the net value of the fund is, the main purpose is to protect the interests of A share holders.

To put it simply, if it rises too well or falls too badly, it will trigger the tiered funds to conduct irregular conversions, and they will all be converted.

2. Irregular Conversion The methods for handling upward and downward discounts are different. The downward discount of tiered funds usually occurs when the net value of share B drops to 0, and the upper and lower discounts are triggered by tiered funds.

Is the fund discounting a loss? Based on the reasons for the above-mentioned discounting, we can understand that the fund discounting behavior may indeed be due to serious fund losses, but we also see that this is not the only situation.

When investors encounter a fund discount, they must first understand the reason for the fund discount. If the shares of Fund B exceed 1 and 2, then the discount at this time is just a dividend, which will have little impact on investors; if it is because the fund has fallen too sharply

The resulting discount is not a good sign for investors, and investors should take measures as soon as possible.