In the A-share market which lacks trend-based opportunities, fund products that provide transactional opportunities are increasingly valued by companies. The positioning of tiered funds to meet the needs of different investors has become a popular product in the fund company's product library. Current data from multiple sources also shows that by the end of 2012, the number of tiered funds is very likely to exceed 60. With the same tracking benchmarks and similar tiered structures, creating various different style product pools, there is originally not much difference among public offering products. Known for innovation, tiered funds are gradually becoming a necessity. Behind the sharp increase in the number of tiered funds, the road to differentiated characteristic products pursued by fund companies appears even longer.
The multi-win situation of tiered funds: In mid-February, Yinhua Xingrui had a 45.8% increase in market price over 5 trading days. Its on-exchange shares surged by over 700% at peak during 6 trading days. Investors saw arbitrage opportunities in it, brokers saw rising commissions behind the active secondary market trading, and fund companies once again saw a vivid example of a sharp increase in the company's market share in a weak market.
In the eyes of many fund industry insiders, tiered funds are currently a good choice that benefits investors, brokers, and fund companies. Relevant personnel from Xinda Fund believe that as a trading tool product, tiered funds have characteristics and advantages such as a tiered mechanism, leverage effect, and tradability, which can achieve win-win for all parties.