Core Insights - The number of fund liquidations is accelerating, with 47 public funds having been liquidated since the beginning of the year as of March 19, 2023 [1][2] - Over 1,000 funds are currently below the 50 million yuan threshold, indicating a significant number of "mini funds" facing potential liquidation [2][3] - The primary reasons for the increase in liquidations include declining market performance leading to reduced fund net values and increased investor redemptions [3] Fund Liquidation Trends - As of March 19, 2023, 47 funds have been liquidated, with 31 of these liquidations triggered by contract termination clauses due to net asset values falling below 50 million yuan [1][3] - The trend of fund liquidations began three years ago, with the number of liquidated funds exceeding 200 annually from 2021 to 2023, a significant increase from the 100 liquidations in 2019 and 2020 [2][3] Reasons for Liquidation - The overall decline in the stock market has led to significant reductions in fund sizes, prompting many funds to face liquidation [3] - The rise of "initiated funds," which require a minimum asset value of 200 million yuan after three years, has contributed to the liquidation trend, as many have failed to reach this threshold [3] Fund Company Responses - Fund companies are faced with the decision to either liquidate or "shelter" their funds, with many choosing to liquidate underperforming funds due to high maintenance costs [3][5] - Some companies attempt to "shelter" mini funds by increasing marketing efforts or using proprietary funds to boost asset values above the liquidation threshold [3][5] Case Study: Fund Sheltering - The example of the 工银中证消费龙头ETF illustrates the "sheltering" strategy, where the fund's net asset value fluctuated around the 50 million yuan threshold, requiring significant inflows to avoid liquidation [4][5]
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