I received a text message saying that my share of the fund was forcibly reduced. What does it mean?

For fund companies, it is to adjust investors’ shares to comply with regulations. Increases are usually caused by share upgrades, event rewards, or splitting to increase shares, etc. Reductions rarely occur, usually because you bought the wrong share. The starting point for monetary fund B is 5 million. If you don’t have enough and want to buy more, you will definitely have to reduce it to Category A, and then there are situations such as combined shares. In short, there are many situations, but generally speaking, they have no pros and cons and are neutral events.

The first is to protect Class A shares with stable and fixed expected annualized income characteristics, so that in the event of extreme market conditions, the principal of Class A shares will be allocated first according to the agreed expected annualized income distribution mechanism. If the net value of B returns to zero, there will be extreme losses to the A share, and the protection of the principal and expected annualized income of the Class A share will be lost.

The second is to constrain the leverage ratio of the B-side share, because once the net value of the B-side share is very low (such as 0.25), the B-side share leverage ratio will be very large, and as the B-side net value becomes smaller , the larger the leverage ratio is, even to dozens of times, the result of speculative trading may be great volatility, and you may even have to choose between the upper limit and the lower limit, which is not conducive to market investment and carries great speculative risks.