Make the net value of the fund equal to or close to 1, so as to increase or decrease the share of investors accordingly.
However, the proportion held by everyone remains unchanged, which has no effect on everyone's holding rights and interests.
Simply put, conversion is to restore the leverage of graded funds. If there is no conversion, the leverage of graded funds will become larger or smaller. However, the significance of stock conversion is not only to restore leverage. In many cases, conversion is also a mechanism to cash in earnings and protect A-share holders.
Fund conversion can be divided into regular conversion and irregular conversion.
Periodic switching: refers to switching at a fixed time. There are generally two situations: the first is the first working day of each year; The second is the open day after the fund completes 1 operation cycle. At the time of regular conversion, no matter what the net value of the fund is, it will be converted.
Irregular transformation: This requires a trigger condition. According to her financial statistics, in most cases, the net value of the parent fund reaches 1.5, or the net value of B shares drops to 0.25. Simply put, rising too well or falling too badly will lead to irregular conversion of graded funds. However, only listed funds will switch from time to time, and non-listed funds will only switch regularly.