1. Contract Expiration: When the fund is established, the contract stipulates that it will be liquidated when it expires.
For example, closed-end funds generally have a duration, and if they do not extend their duration after expiration, they will be liquidated.
2. Holder's voting: the fund share holders' meeting voluntarily decides to terminate the fund contract and then liquidate it.
3. Compliance liquidation: Liquidation is necessary because it does not meet the regulatory requirements. For example, under the requirements of the new asset management regulations, capital preservation funds should be gradually withdrawn from the market, or transformed into other types of funds, or directly due for liquidation.
4. Passive liquidation: the fund scale is too small, which triggers the liquidation "red line" and is forced to terminate.
According to China's regulations, if the net asset value of an open-end fund is less than 50 million yuan for 60 consecutive days, or the number of fund share holders is less than 200 for 60 consecutive days, the fund company has the right to announce the termination of the fund after the approval of the CSRC. And sponsorship money. If the net asset value of the fund is less than 200 million yuan 3 years after the contract comes into effect, the fund contract will be automatically terminated. After the fund is liquidated, the assets will be returned to the investor, so the investor's money is still there, but there are several points to note:
1. Fund investment is long-term. If the fund you invest in is still losing money before closing the position, there is no chance to return it after closing the position;
2. In the process of liquidation, if the market fails to undertake well, it is likely to sell assets cheaply, resulting in losses;
3. The capital settlement process takes a certain period of time, usually 1-6 months, during which your funds will be frozen and you can only get 0.35% bank current interest, which may waste the opportunity cost.
Question 2: Is the bigger the fund, the better?
If the scale of the fund is too small, there is a risk of liquidation, and the scope of investment available is not large. In addition, fixed expenses such as information disclosure fee, audit fee and lawyer's fee are allocated to the unit share. So it is generally not recommended to buy small-scale funds. Is the fund bigger, the better?
For funds involving active management, the bigger the fund, the better. There are three reasons:
1. is not conducive to fund managers to adjust their positions. When the market is depressed, the market turnover is small. If you have a large number of tickets in your hand, you may not find anyone to buy them if you want to sell them.
2. It is not conducive to fund managers holding shares. Because of the "Double Ten Regulations" in Public Offering of Fund, a fund holding the same stock shall not exceed 65,438+00% of the fund assets, and all funds under a fund company holding the same stock shall not exceed 65,438+00% of the market value of the stock. Therefore, the larger the fund scale, the greater the restrictions on fund managers' shareholding, and fund managers may not have so much energy to investigate and track multiple stocks.
3. It is easy to cause lazy management. The income of the fund company mainly comes from the management fee drawn in proportion to the fund size. Whether the fund makes money or not, we have to pay this management fee. Small-scale foundations attract new users by fighting for performance, thus expanding their scale and increasing their income. And the large-scale fund, the income is considerable enough, and the fund company may tilt more resources to the small-scale fund.
Therefore, the scale of active funds can be moderate.