Graded funds, also known as "structured funds", refer to the types of funds that show two-level (or multi-level) risk-return performance with a certain differentiated fund share by decomposing the fund income or net assets under a portfolio. After splitting the parent fund, the following two options are provided for different types of investors.

Conservative investors, risk aversion: stable share (Class A share), similar to fixed-income products, get fixed income at agreed interest rate, and get high-risk share first, with less risk.

Aggressive investors, pursuing income: aggressive shares (B shares), after paying a steady share, get residual income.

Simply put, Class A shares lend money to Class B shares for venture capital investment, which makes Class B shares leveraged. Class B shares will pay a fixed income to Class A shares every year, and the profit and loss after deducting this fixed income will be borne by Class B shares.