Comprehensive interpretation of graded funds

Graded funds, also called "structural funds", refer to the formation of two-level (or multi-level) risk expected years by decomposing the fund's expected annualized expected return or net assets under an investment portfolio. Fund types with certain differentiated fund shares in expected return performance. Its main feature is to divide fund products into two or more types of shares and give them different expected annualized expected income distributions respectively. The sum of the products of the net value and share ratio of each sub-fund of a hierarchical fund is equal to the net value of the parent fund. For example, the net value of a parent fund split into two types of shares = the net value of class A sub-funds XA share % + the net value of class B sub-funds XB shares %. If the parent fund is not split, it is an ordinary fund. (The above is the content of Baidu Encyclopedia. After reading this, many people still don’t understand what graded funds are, what does this have to do with us investors, or where should I buy it?) Well, today I Let me do some popular science work on tiered funds for everyone.

I will use vernacular to communicate with you in the following content, so that everyone can understand what a graded fund is. It is actually very simple. For example, a mother gave birth to two children, one of whom is a very honest child. , one is a very noisy child, some people think highly of the honest child, and think that if the child is honest, he may live a stable life, but he will not have any big future, but some people think that the very naughty child is not obedient, and if he doesn't do it in the future, Either you become a scum of society or you become a successful person, so some people like honest children, and some people like naughty children.

Graded funds have two different investment methods and investment returns, side A and side B. Let’s talk about side A first:

Side A: It is a fixed expected annualized expected return. For example, the expected annualized expected return every year is about 5%. If you invest 1 million, you will get about 50,000 every year. You can get this amount no matter whether the market is rising or falling (the historical expected annualized expected return rate varies, you can go to According to the website, I used 5% as a metaphor.) Which investors are suitable for investments such as A-end? Investors who are older, not resistant to risks, and seek stability.

B-side: This is not a fixed expected annualized expected return, because the leverage risk is still relatively large. If it goes up, it is okay. If it goes down, not only will you have to pay the fixed expected annualized expected return on the A-side, but also If you lose more money, I will tell you about the B side in detail later.

Okay, there are still people who don’t know what tiered funds are, so I will tell you in the form of a story:

Lao Zhang is very old, but he also wants to invest. , but because I am older and have no ability to choose stocks, and I feel that stocks are very risky, but I deposit my money in the bank and feel that the interest rate of the bank is very low, what should I do? He heard from others that tiered funds were good, so he started to do tiered funds. He spent 1 million to buy the A side of the tiered fund. Because he was too old and was not resistant to risks, he chose the A side and calculated it based on an annual rate of 10%. After the new year, Lao Zhang should get 1.1 million, regardless of whether the market is up or down, but this is not over. If this is the case, this is no different from an ordinary financial product. At this time, there is a Xiao Liu who also has some money in his hands, but there is no He wanted to invest in the stock market but he didn’t know how to pick stocks, but he had the ability to bear risks and wanted to make a lot of money. He heard that tiered funds could help him, so he bought the B side of tiered funds because he was young. To resist risks, he bought the B-side. He bought the B-side for 500,000 yuan.

Lao Zhang bought the A side for 1 million, and Xiao Liu bought the B side for 500,000. The two of them added up to 1.5 million. When the index rises by 40%, it means that 1.5 million has increased to 2.1 million. How should the 2.1 million be divided between Lao Zhang and Xiao Liu?

2.1 million minus Lao Zhang’s principal of 1 million + Lao Zhang’s fixed expected annualized expected income of 100,000 = 1 million

The remaining 1 million is all small Liu's is equivalent to Xiao Liu investing 500,000 and making a profit of 500,000, which is doubled. This is leverage.

But the risk is also very high. When the index drops by 20%, it is equal to 1.5 million-300,000 = 1.2 million.

120-Lao Zhang’s 1.1 million = 100,000

This 100,000 is Xiao Liu’s, and the principal of 500,000 will be 100,000 left after one year. So the risk is also very high.

So let me give you a little suggestion: do the A-side in the bear market (make money in both ups and downs); do the B-side in the bull market (high risk and expected annualized expected return)

But I still suggest Everyone must have their own stock picking ability and judgment ability. Putting money in your own hands and letting yourself operate is the real thing. Don't rely entirely on others!