The up-discount and down-discount of graded funds refer to the practice that graded funds regularly or irregularly convert the net value of A and B shares under the parent fund in order to adjust leverage or rationally distribute the interests of holders.

graded fund conversion can be divided into regular conversion and irregular conversion.

graded funds can be converted into discounts on a regular basis. Funds that are not listed and traded can only be converted on a regular basis.

periodic conversion refers to conversion at a fixed time. There are generally two situations: the first working day of each year or the open day after the fund has completed one operation cycle. Some funds convert AB shares separately.

some funds convert the parent fund and share A, but not share B (only for periodic conversion). During periodic conversion, regardless of the net value of the fund, they will be converted. When converting from time to time, the processing methods of up-folding and down-folding are also different. When and how to convert graded funds will be explained in the fund prospectus.

Extended information:

Graded fund conversion enables the sub-fund shares to get dividends in the form of the parent fund that can be redeemed according to the net value, thus ensuring that the transaction price can reflect the value of the net value. If the sub-fund shares of a graded fund at a certain stage are not converted to the dividends of the parent fund, any net value assignment to them is a "nominal" number and cannot be substantially realized.

For example, when the net income of Shenwan is less than or equal to 1 yuan, Shenwan Shenzhen Component Index has not been converted, and at this time, the net income of Shenwan and Shenwan enterprising are meaningless. Conversion is divided into maturity conversion, regular conversion and irregular conversion. Most Class B shares do not participate in regular conversion.

The periodically converted Class B shares of Double Jubilee 1, Castrol, Southern Consumption and Tongqing 8 are also converted into parent fund shares in the part where the net value exceeds that of 1 yuan. Since most of the net value of Class A exceeds 75% at the time of discount, it is converted into the parent fund.

Baidu Encyclopedia-Graded Fund