What does the net fund value mean? Why does the net value of the fund explode? I believe many people want to know the meaning of this short position, so Bian Xiao specially arranged the meaning of the short position of the fund net value for everyone, hoping to help everyone.

What does the explosion of fund net value mean?

The net fund value cannot be "exploded", because the net fund value is an indicator to measure the relationship between fund assets and fund shares, and it is the calculation result of the net fund asset value corresponding to each fund share.

The net fund value represents the ratio of the net asset value of the fund to the fund share, which is usually expressed by the net asset value of each fund or the net asset value of each fund unit. The calculation method of fund net value is the total assets of the fund MINUS liabilities, and then divided by the total share or number of units of the fund.

The change of fund net value reflects the fluctuation of asset prices held in the fund portfolio, and also represents the value change of fund shares held by investors after market changes. The rise and fall of the fund's net value can be calculated according to the price changes of the securities held in the portfolio. When the market is good, the net value of funds rises, and vice versa.

As an important indicator for investors to measure the investment income of funds, the net value of funds is of great significance in selecting and evaluating funds. Investors can make risk assessment and investment decisions by observing the changing trend and historical performance of fund net value.

When will the fund explode?

There will be short positions, often because the fund losses are too serious. Generally speaking, it may be because the risk control of the fund is too poor, so the fund fell badly; It is also possible that the fund manager added leverage, but after adding leverage, stocks or bonds developed in the opposite direction, thus triggering short positions.

Generally speaking, Public Offering of Fund in China will not explode. However, if the asset allocation ratio exceeds 100%, that is, the fund manager leverages through bond pledge repurchase, then when the price of pledged bonds falls and some funds pledged by the fund manager suffer losses, it may cause great losses and lead to short positions.

Public Offering of Fund has strict institutional leverage restrictions on investment: the leverage ratio of open-end funds should not exceed 140%. For fixed funds, the closed period shall not exceed 200%, and the open period shall not exceed 140%.

Compared with Public Offering of Fund, private equity funds in China are more likely to break out, because the investment risk of private equity funds is higher. Especially for some equity private equity funds, when the companies they invest in are not listed, it means that private equity funds are in a state of loss, which is easy to cause short positions.

Characteristics of hedge funds

The concept of hedge fund is still relatively broad, and many financial products are essentially operated by hedge funds. Hedge funds use leverage to invest more, and hedge funds can also short, and the handling fee is generally higher, including management fees and sharing fees.

Hedge funds do not guarantee profits, and most of them belong to private investment companies, and their leverage will be higher. Therefore, hedge funds are mainly suitable for institutional and individual customers with large funds, and ordinary investors are often unable to bear their risks.

What impact does the fund explosion have on investors?

1, it will lose money. When the fund explodes, the equity in the investor's margin account is negative, indicating that the fund will lose money when it explodes.

2. There is no remedy. When the position is short, the system will force the liquidation, the fund can't cope with the redemption, and the investor needs to bear all the losses.

But in general, the probability of fund explosion is very small. When buying funds, investors should pay attention to the historical performance and operation of funds and avoid buying funds that may explode.

If the investment fund is currently in a loss state, but there is a rebound trend in the future, then investors can consider making up their positions appropriately and increasing their investment. This applies to fund products with excellent historical performance and good management. On the other hand, if investors don't want to take high risks, it is recommended to choose low-risk funds from the beginning.

So is it possible for the fund to lose negative money? If the fund does not operate well and continues to decline, it will be liquidated after meeting some conditions, so the probability of negative losses is very low and it is basically difficult to happen. According to relevant regulations, if the net asset value of the fund is less than 50 million yuan for 60 consecutive days, it can be liquidated.

What does the short position of the fund mean?

Short position refers to the situation that the customer's rights and interests in the investor's margin account are negative under some special circumstances. In most cases, the biggest reason for short positions is related to improper fund management. Moreover, stock financing and securities lending, futures, options and so on will only explode. It should be noted that although the fund account will not explode, the loss will be uncontrollable.