Some investment and wealth management tools have the risk of compulsory redemption, and some tools will cause great losses when redeemed, such as convertible bonds in the securities market. In addition to convertible bonds, stock accounts can also trade ETFs, so will ETFs be forcibly redeemed?

Will ETF be forcibly redeemed?

ETF may have the possibility of compulsory redemption, but it will happen in some specific circumstances and rarely happens. For funds, the compulsory redemption in the process of fund operation is generally divided into the following two situations:

1 When investors redeem the funds they hold, when the fund share balance held in the trading account of the consignment agency is less than the minimum holding share, the funds with balance in the account will be forcibly redeemed together.

2 If the number of fund shares held by investors in the account of the consignment agency is lower than the minimum redemption share due to other reasons (such as non-transaction transfer), the consignment agency allows investors to hold the fund redemption share lower than the specified minimum redemption share, but it must be redeemed at one time. Different fund products have different minimum redemption shares, which are usually clearly stipulated in the fund contract.

In addition, when the fund products are terminated, the fund products will be liquidated, and the assets held by the fund will be realized and distributed to the fund holders.