If the fund is liquidated, it will lose money. Although after the liquidation of the fund, the fund company will calculate the income according to the net value of the fund on the termination date, but the liquidation of the fund is often due to poor performance or inability to continue to operate, so the net value will continue to fall before the liquidation, resulting in serious losses for investors.

According to China's Fund Management Regulations, there are four main situations of fund liquidation:

1. Maturity liquidation: that is, the fund management time expires, just like the lease contract expires. If the lease is not renewed, it can only be liquidated.

2. Voting liquidation: the fund holders hold a share holding meeting, and everyone votes to terminate the contract.

3. Direct liquidation: generally refers to the red line that triggers the fund operation management law, namely: first, the net asset value of the fund is less than 50 million for 60 consecutive working days of public offering, and second, the number of fund share holders is less than 200 for 20 consecutive working days.

4. Compliance liquidation: Generally speaking, it refers to non-compliance with regulatory requirements or policy changes, such as umbrella funds in the previous stock market crash and graded funds in recent years.