Among domestic public funds , have you ever found the same fund with the same name but a letter “tail” behind it, such as Huaxia Consumption Upgrade Hybrid A and Huaxia Consumption Upgrade Hybrid C? What does it mean to have two different letters in the same name? What is the difference between them? Are they the same fund? Which fund should we choose as our investors?
(1) English suffix of monetary fund
The common suffix of currency funds is AB, taking Golden Harvest currency funds as an example. Golden Harvest Currency A is similar to Golden Harvest Currency B. Both are managed by Golden Harvest Fund . The only difference is the investment threshold. The threshold for starting investment is different, and the corresponding interest rate is also different. The threshold for Golden Harvest Currency A is very low. You can invest more than 100 yuan, and the interest rate is relatively small. It is suitable for small US retail investors. Golden Harvest Currency B is not. It has invested at least 5 million yuan in this fund, mainly for local tyrant institutions.
(2) Letter suffix of non-monetary funds
In non-monetary funds, we will see that there are three types of shares in ABC, the difference is mainly in the way of charging. For example, A-share usually refers to the front-end charging model of the fund, and B-share refers to the back-end charging model of the fund . That is, the purchase fee is paid upon redemption. This fee is based on how long you hold the fund. Every fund is different. Class C shares, that is, the fund does not charge any subscription fee, but a sales service fee, and the redemption fee for this unit is relatively low.
(3) Tiered Funds
Finally, let’s talk about tiered funds, which is the third case we mentioned. For the same fund, different shares represent different rights and obligations, and the risk-return attributes will be completely different.
There are actually three types of shares in a tiered fund, namely parent shares, Class A shares and Class B shares. Class A shares represent low-risk stocks, and Class B shares represent high-risk stocks. Therefore, for a tiered fund, we will find that it has three net worths at the same time , representing these three shares.
A share: The expected risk and return are low, and the benchmark income distribution can be prioritized
B share: has a “leverage effect”. Generally speaking, it is to borrow money from A shares to invest. It can earn outsized returns, but it can also take on greater risks.
Like mother has two dollars. She gave her two children, A and B, a share each. B asks A to borrow money to invest in stocks, and promises to give A a certain rate of return. So B gets two dollars into the stock market, and A relies on the interest B gave him to make money.