The Study Of The Design Of Leverage And Classification Fund Pricing

The aims of the article is to analyze the nature of the Classification Fund, and thedevelopment of the Classification Fund in the domestic or the outside, makingcomprehensive analysis of the difference between all kinds of Classification Fund andGeneral Fund in the domestic market, and its own characteristics and profit model. InChina since July2007, UBS SDIC Fund Management Company introduced the firstclassification Fund-SDIC the UBS Redford classification fund so far, the classificationof the Fund gets rapid development. With the differences in leverage and risk-returncharacteristics as the original fund in the financial products different, it created a series ofrisks, leverage and investment products to adapt to different populations. With theincrease of the number of products, the classification of fund product design hasgradually moved toward sustainable development. With investment targets, the mode ofoperation, organizational form, it made lots of innovations and explorations. At present,grading funds play an increasingly important role in China’s investment market. From themode of operation, mode of operation should choose a more flexible method, based ondifferent investment objectives need.Split from the risk-benefit point of view, the classification funds began to be moreclearly defined the benefits and risks. From income style from the point of view, thepassive index type of investment has become increasingly obvious trend. Index-basedinvestments will help to ensure the stability of the income-style, to strengthen the valueof the classification fund floor trading tools. From the raise method, the overall raisingand separation transaction mode will promote the rapid development of the fundclassification.For the classification of funds, there are a series of questions to be answered. Howto determine the theoretical value of the classification fund, Whether we can find anobserved and quantifiable indicators as the main factors to the market price of suchproducts. This article will provide some preliminary answers to the above questionthrough the study of the grading and pricing of the classification fund.The article is divided into four parts. First it introduced the development of classification fund domestic and international. Second, according to the exposition ofclosed-end fund discount, it leads to the need for leveraged funds. Third, we are going tointroduce the theoretical basis of designation and operation of the Fund. Forth, using theDiscounted Cash Flow Technique pricing model to price classification fund and makerisk management by way of example experiments on the classification of the operation ofthe fund’s portfolio.