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economic observer reporter chen shan recently, the number of public fund liquidations has been increasing, and mini funds have been exiting the market at an accelerated pace.

as of september 19, 201 funds have been liquidated this year, a record high in recent years. among them, 41 funds withdrew in august, the highest monthly number since october 2018.

the large-scale liquidation of funds is still continuing. since september, 22 public offering products have been liquidated, and more than 70 funds are on the verge of liquidation, repeatedly issuing warning notices that may trigger contract termination.

at present, there are 1,654 funds in the market whose net asset value is below the "warning line" of 50 million yuan, accounting for about 13.6%.

industry insiders generally believe that under the overall market volatility this year, the decline in fund net value and investor redemption have led to the gradual shrinkage of the size of some funds and eventually triggered liquidation. a fund evaluation expert pointed out that currently, the number of fund products in the entire market exceeds 12,000, and the industry competition is very fierce. survival of the fittest is an inevitable trend. fund companies should combine their own resource endowments to issue distinctive products that can survive for a long time.

more than 200 funds have been liquidated this year

wind data shows that since september, a total of 22 products have been liquidated by fund companies including huaan fund, puyin ansheng fund, penghua fund, baoying fund, jianxin fund, and bank of china fund. the reasons for the liquidation of these funds are mostly due to the triggering of contract termination clauses.

on september 13, two funds, puyin ansheng anhe return and penghua zhehua one-year holding, ceased operation and entered the liquidation procedure. puyin ansheng anhe return announced that because the net asset value of the fund was less than 50 million yuan at the end of the last working day of the 2024 opening period, it triggered the termination reasons stipulated in the fund contract and entered the liquidation procedure without the need to hold a general meeting of fund unit holders; penghua zhehua one-year holding declared the fund contract terminated because the net asset value of the fund was less than 50 million yuan for 50 consecutive working days.

in september, other funds that withdrew from the market due to triggering the 50 million yuan liquidation "red line" included baoying xiangle one-year holding,boc securitiesadvantage growth, bosera csi hong kong stock connect consumption theme etf, taikang prosperous industry, taikang quanlin quantitative value selection, boc securities balanced growth, yinhua csi r&d innovation 100 etf, etc.

wind data shows that 201 funds have been liquidated from the beginning of this year to september 19, exceeding the 194 in the same period last year. at the same time, the number of fund liquidations has been increasing month by month since april. in april and may, the number of liquidated funds was only 13 and 18 respectively, and by august, it reached 41, setting a new monthly high in the past six years.

yang delong, chief economist of qianhai kaiyuan fund, told the economic observer that the recent increase in the number of fund liquidations is mainly related to the current sluggish market conditions. he said, "during the market decline, the net value of many funds also fell, triggering investor redemptions, which in turn caused the size of some funds to be far below 50 million yuan. at the same time, due to the high cost of maintaining funds, many funds have been liquidated."

zhu runkang, the public offering product manager of paipai.com wealth, also said in an interview with the economic observer that the overall market has been volatile this year, investor sentiment has turned conservative, redemption funds have increased, and the scale of some funds has dropped rapidly, facing great pressure, which is the key reason for the final triggering of liquidation conditions. zhu runkang also said that in a volatile market environment, fund companies may adjust their product strategies, which is also a reason for the liquidation of funds. in addition, regulators have put forward higher requirements for fund operations, which has also prompted fund companies to optimize and clean up their products.

it is worth mentioning that since the end of july, many sponsored fund products have been liquidated due to failure to pass the "three-year test". these products were established three years ago. according to the agreement, if the net asset value of the fund is less than 200 million yuan on the corresponding day three years after the fund contract takes effect, the fund contract will be automatically terminated.

since september, at least jianxin csi all-share securities etf link, dongcai securities etfinnovative medicalfive initiator funds, namely, the six-month fixed-term fund, harvest strategic opportunities, huabao shenzhen innovation 100 etf linkage, and caitong asset management csi nonferrous metals, failed to pass the "three-year test" and were liquidated. in august, the number of liquidations of such products reached 14.

li zhaoting, a researcher at yingmi fund, said that when the equity market performs poorly, investors' declining investment enthusiasm will affect the growth of the scale of public funds; on the other hand, sales channels may be more inclined to sell new funds or "easy-to-sell" funds, which will also affect the scale of existing initiated products.

in zhu runkang's view, "the fact that the initiated product has not grown in scale within three years may also reflect the fund's shortcomings in strategy, operation or marketing. facing liquidation is also a natural choice of the market."

liquidation warnings are frequent

in addition to the funds that have been liquidated, many funds have recently issued liquidation warnings.

on september 19, icbc credit suisse's consumer leader etf issued a reminder announcement stating that as of the end of the day on september 19, the fund's net asset value had been less than 50 million yuan for 45 consecutive working days. according to the fund contract, if the above situation occurs for 50 consecutive working days, the fund manager will terminate the fund contract after completing the liquidation procedures, and there is no need to convene a meeting of fund unit holders for deliberation. on the same day, bosera guozheng 2000 etf, fu'anda yangtze river delta regional theme mixed, zhonghai haiyi mixed, huabao anrong six-month holding period bond and many other funds also issued reminder announcements that the net asset value of the fund was continuously less than 50 million yuan.

the economic observer has sorted out public information and found that since september, more than 70 funds have issued warning notices that may trigger contract termination. most products may trigger fund contract termination because their long-term balances are below 50 million yuan. the publishers of such announcements are mostly active equity and passive index products. some initiator products are about to expire for three years, and there is a possibility that the scale on the expiration date will be less than 200 million yuan, triggering liquidation.

wind data shows that as of september 19, 2024, there are 2,068 sponsor-type funds (only main codes, the same below) on the market, of which 1,066 have a scale of less than 200 million yuan, accounting for more than half.

at present, there are 1,654 funds in the market whose net asset value is less than 50 million yuan, accounting for 13.6%.

as the number of mini funds increases, the liquidation of funds is accelerating. li zhaoting said that on the one hand, the market has been volatile in recent years, fund products have performed poorly, and investors have chosen to redeem; on the other hand, some products may be too small due to lack of competitiveness or strong product homogeneity.

a public fund manager in shanghai said frankly: "when many fund products were first established, fund companies hoped to increase their differentiated layout, improve their product lines, provide more choices for holders, and gradually expand their management scale. however, after the successful issuance of some funds, it is difficult for them to obtain financial support through subsequent continuous marketing. when the market conditions are not good, it seems that no matter how they do marketing, it is difficult to make any progress. in the end, they are easily faced with liquidation."

some fund evaluators believe that the survival of the fittest is an inevitable trend, and the normalization of fund liquidation will be an important step for the industry to move towards high-quality development, and it will also be a test for fund managers and investors. fund companies should re-examine their product layout strategies, liquidate some mini funds that have little significance as soon as possible, and in the layout of new products, they should combine their own resource endowments to issue distinctive products that can survive for a long time.