Division of funds
Fund split, also known as split fund, refers to a way to change the corresponding relationship between the net value of fund shares and the total amount of fund shares and recalculate the fund assets on the premise of keeping the total assets of fund investors unchanged. After the fund is split, the original portfolio remains unchanged, the fund manager remains unchanged, the fund share increases, and the net value of unit share decreases. The split of fund shares can reduce the net value of fund shares by directly adjusting the number of fund shares, without affecting the realized income, unrealized income and paid-in fund. A simple understanding is to split the fund share, so that the fund share will increase, while the net value of the fund unit will decrease, while the total assets of the fund will not change, and the fund assets held by our investors will not change.
Reasons for the division of funds
According to the fund company's explanation, fund splitting can reduce investors' sensitivity to price, which is conducive to the continuous marketing of the fund, improve the structure of fund share holders, and help fund managers to operate the fund more effectively, thus implementing the investment concept and investment concept of fund operation.
Split funds mainly have excellent past performance and high net worth. In order to meet the psychological needs of investors and break the market paradox, investors can buy good funds at relatively cheap prices. The split of fund shares can also effectively solve the problem of "compulsory dividend", effectively reduce transaction costs and reduce the influence of day trading on the securities market.
Therefore, these old funds with excellent performance and relatively small scale may choose to split the fund and attract more investors to improve the holder structure and fund size without affecting the original holders. The size of the split fund is generally small, and the expansion of the scale after the split is unfavorable to the operation of the fund.