Research On Arbitrage Strategy Of China 's Grading Fund

In recent years, the rise of graded fund investment is a new type of financial leverage investment. The leverage of financial products is to increase the value of investment by financing such transactions, thereby increasing the return on investment. Compared with the international market, China’s leveraged financing model is still relatively limited, in this context, China was born in 2007 by setting the priority level of bad structured classification fund. The vast number of investors have been attracted by the financial products, the trading volume of the fund’s classification is rising year by year. This classification of the first foreign development fund, in our country has been very good adaptability, and in recent years, the rapid development of high speed, whether it is the size or volume has been greatly improved. Especially in the 2014 first half of half a year to 2015 the bull market period, due to the characteristic of classification of the fund’s leverage, many grade B are out of the market even more impressive, which makes the major domestic fund management companies issuing fund product classification of enthusiasm. Retail investors tend to be more familiar with the stock investment and not enough emphasis on grading products, driven by this wave of bull market, more investors are also noted that this kind of leveraged transactions. In the actual rebound in the market or in the middle of the bull market, the classification of the fund will be the first to go out of the market. We can see that the rapid development momentum of the classification fund will make it become the main form of domestic fund in the future.On the other hand, classification of the fund’s leverage mechanism makes the risk for different types of investors are satisfied, classification of the fund of funds since the stock market index portfolio is in general, so it can meet the general risk investors; priority share due to security and income is fixed to meet conservative type investors; enterprising share because of the addition of leverage, exacerbate price to meet the aggressive investment investment demand.Firstly, this paper introduces the development situation of the classification fund, the related concepts and the operation mechanism of the fund. Then, it describes the operation mechanism of the grading fund from the lever characteristics and the translation mechanism of the fund. Then from the classification of the fund’s discount rate and the matching of the transfer terms to study the classification of fund arbitrage, to provide investors with a more rich theoretical basis.