"no chance of recovery after holding on", 208 funds exited the market this year
2024-09-26
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"the worst thing about buying a fund is probably not that you keep losing money, but that you want to grit your teeth and hold on, but the product is gone." investor xiao tang told the first financial reporter that he no longer has a chance to make his money back on a fund he holds because the product was liquidated recently, so he was passively "relieved."
entering the second half of the year, the pace of fund liquidation has accelerated significantly. wind data shows that 29 funds have been officially liquidated since september, an increase of 52% year-on-year, and this figure has also hit a record high in the past six years. nearly 100 products have "closed the curtain" in the past quarter. at the same time, there are thousands of products with a scale of less than 50 million yuan.
according to incomplete statistics from china business news, more than 80 funds have issued liquidation warnings in the past month. if the performance and product operation fail to attract investors, it may only be a matter of time before these products are liquidated. in the view of industry insiders, the fund liquidation system has many benefits for the healthy development of the industry, but for individual investors, the liquidation of the funds they hold will undoubtedly affect their investment experience. if the net value of the fund has fallen, they may also face the loss of principal.
more than 200 funds closed
before the national day holiday, several funds joined the ranks of liquidation and exit. on september 24, invesco great wall excellence growth issued an announcement that the fund's last operating day was set for september 23, and it entered the liquidation procedure on the 24th. the reason for the liquidation of the fund was that the net asset value of the fund was less than rmb 50 million for 50 consecutive working days, thus triggering the termination circumstances stipulated in the fund contract.
wind data shows that invesco great wall excellent growth was established on february 1 this year and has been in operation for only more than 7 months. as of september 23, the cumulative return of invesco great wall excellent growth a since its establishment was -1.22%. in terms of scale, the fund's initial fundraising scale was 553 million yuan, and historical announcements showed that as of may 13, the fund's net asset value had been below 50 million yuan for 30 consecutive working days.
in other words, on march 26, just over a month after its launch, the fund size of invesco great wall excellent growth had already shrunk by more than 500 million yuan, a shrinkage of more than 90%. subsequently, the fund size rebounded briefly, reaching 90.5913 million yuan at the end of the second quarter. since august, invesco great wall excellent growth has successively issued three liquidation warning notices and officially left the market.
on the same day, other products that were liquidated included huafu guochao selected fund, huaxia borui one-year holding fund, and huabao anyue one-year holding fund. as of the end of the second quarter, the fund sizes of the above three funds were 15.3816 million yuan, 9.84 million yuan, and 50.0545 million yuan, respectively.
among them, huabao anyue one-year holding was also liquidated for the reason that "the net asset value of the fund was less than 50 million yuan for 50 consecutive working days". the situation of huafu guochao youxuan and huaxia borui one-year holding is different. the announcement shows that both are initiated funds established on september 23, 2021, and the termination was triggered because the net asset value failed to reach 200 million yuan after the contract came into effect for three years.
including these products, 29 products (only counting initial funds, the same below) have pressed the "termination button" since september. although september has not yet ended, this number has increased by more than half compared to september last year (19 products), and has also hit a record high in the past six years.
the reporter of china business news noted that the pace of fund liquidation has accelerated significantly since the second half of the year. in the first six months of this year, a total of 111 products were liquidated, with the highest number of 25 in june. in july and august, the number of liquidated funds was 27 and 41 respectively. together with the 29 since september, the number of liquidations in three months has reached nearly 100.
at present, the number of fund liquidations this year has exceeded the integer mark of 200. wind data shows that as of september 25, based on the fund expiration date, a total of 208 funds (only initial funds are counted, the same below) have withdrawn from the capital market this year. among them, equity products (including stock and mixed funds) that are closely related to the a-share market account for more than three quarters.
it is difficult to grow in scale under performance pressure
according to industry insiders, if we dig deeper into the reasons for liquidation, bond funds may have exited because institutional funds have other needs; while equity funds are mainly abandoned by investors due to poor performance, but volatile markets will also increase the risk of liquidation of "mini funds". in terms of liquidation types, 156 products had to leave the market due to "triggering the termination clause of the contract".
against the backdrop of the market continuing to be in a slump in recent years, the performance pressure on the public offering industry has increased. some products with poor performance are facing the dual pressures of declining unit net value and investor redemptions. it is also difficult to attract new funds, and ultimately they have to choose liquidation due to the continued shrinking scale.
taking the 21 equity funds that were "forced" to leave the market in september as an example, only four products had positive returns this year. the best performing taikang cyclical industry a had a year-to-date return of 3.84%, while the worst performing boc securities advantage growth a had a year-to-date loss of 34.55%.
looking at the "lifetime" of these products, most of them were established at the high point between 2021 and 2022. after two to three years of decline, their net value also fell, and even became "three-cent funds" or "four-cent funds". according to statistics from china business network, the adjusted unit net value of 9 products in the above range is less than 0.7 yuan. in other words, the loss of these products has exceeded 30% since their establishment.
among them, the lowest adjusted unit net value is huaan guozheng biomedicine connection a and huaan zhongzheng photovoltaic industry connection a, with the latest adjusted unit net value of 0.38 yuan and 0.39 yuan. both products were established in september 2021, and have accumulated losses of 62.1% and 60.69% since their establishment.
in addition to the impact of poor performance, changes in investor behavior patterns are also an important reason for redemption. yicai learned from the industry that compared with the past "no redemption when deeply trapped, only exit when slightly rising", some investors choose to flee the equity market regardless of cost. and from the data, the redemption speed of these liquidated funds in the first half of the year is also accelerating.
it is worth noting that among these, many products are sponsor-type funds, that is, products that ignored the minimum establishment threshold of 200 valid subscribers and 200 million yuan in fundraising scale, but were liquidated after three years if they did not reach 200 million yuan. after these products were established at a high point, their performance declined and investors redeemed them, making it difficult for them to pass the scale test.
wind data shows that in the first quarter of this year, the shares of the above 21 equity funds decreased by a total of 12.4432 million shares, of which huaan guozheng biotechnology connection a was subscribed for 14.6913 million shares; in the second quarter, the fund shares were net redeemed by 117 million shares, and dongcai innovation medical six-month fixed-term opening decreased by nearly 40 million shares (39.6504 million shares).
liquidation does not mean that the money disappears
what does fund liquidation mean? a fund industry analyst said that fund liquidation does not mean that all investors' money will disappear. it will distribute the asset income or remaining assets after liquidation to investors in a certain proportion based on the fund shares held by investors.
"however, if the net value of the fund has fallen, investors may also face the loss of principal." in the analyst's view, the size of the fund is affected by capital flow and performance. many small funds have sounded the alarm for fund liquidation due to their inability to attract enough investor interest or poor performance.
industry insiders also hold similar views. a fund industry insider in south china told china business news that if a public fund is a mass financial management product with a small number of holders and a small scale, it means that the product is not recognized by the market and its value is questionable. "especially in the current market, it is difficult to make a product with mediocre performance and little reputation," he said.
however, the person from south china fund also said that after a round of voluntary liquidation, the company will be relatively cautious about liquidating products. "if it is a product with rare quantity or special track, the company may be willing to keep it, because it may be difficult to apply for it later. it still depends on the understanding and positioning of the product."
"liquidation operations are a normal process of survival of the fittest. of course, it is undeniable that the liquidation of equity funds has a great positive correlation with market conditions, but the normalization of the liquidation mechanism will help fund companies concentrate resources on the operation of high-quality products." fang ke (pseudonym), who works in a medium-to-large fund company, said.
fang ke said that "mini" products are small in scale, have a relatively low contribution to the profit margin of fund companies, and have relatively high maintenance costs. therefore, fund companies liquidating such products will help companies optimize resource allocation and improve operating efficiency.
in fact, in the low-level volatile market, a large number of fund products are facing survival challenges. wind data shows that by the end of the second quarter of this year, there were 1,617 equity products with a total scale of less than 60 million yuan, and 1,258 products were struggling under the "red line" of 50 million yuan. the pressure of liquidation is like a shadow.
according to incomplete statistics from china business news, as of september 25, 84 funds have issued warning notices about "the net asset value of the fund has been continuously below 50 million yuan" and "may trigger the termination of the fund contract" in the past month. if these products fail to seize market opportunities and achieve effective growth in scale, they will also face the dilemma of being on the verge of liquidation.
so, how can investors avoid liquidation of funds? "in fact, for investors, there are more than 10,000 fund products in the industry, and the products with a high degree of homogeneity far exceed the needs of investors. funds with too small scale can be withdrawn early and new products can be selected." the aforementioned fund industry analyst believes that it is recommended that investors try to choose relatively large funds and always pay attention to the dynamic changes in fund scale.
(this article comes from china business network)
