How to deal with the discount of graded funds?
If the probability of rebound or reversal in the market outlook is high, and the decline required to trigger the discount is still large, investors can temporarily wait and see in the short term. At this point, investors with particularly high risk tolerance can rebound. If you are uncertain or extremely pessimistic about the market outlook, you can sell decisively. However, once there is a decline, investors should not blindly follow the trend in the process of market decline, but should strengthen their understanding of the products they invest in.
If the graded fund falls and cannot be sold, investors should buy A shares in proportion to their shares and merge and redeem the parent fund. Once the user takes this action, he will bear the fluctuation of the net value of the parent fund for 2 trading days. It is also very important that if the discount has been triggered, if it cannot be sold, you will also choose to buy A shares for merger and redemption.
Generally speaking, it is best to sell the graded fund B, which is about to be discounted. If the B share cannot be sold due to the daily limit, you can only decisively choose to buy the A share. It is best to sell if you can, and you don't have to bear the fluctuation of the net value of the parent fund after the conversion. If it can't be sold, it can only be redeemed by merger to reduce losses. You must sell on the conversion benchmark date, even if there is a rise on that day, you can't buy it, so as to avoid the huge losses caused by the current large premium of B shares.