There are the following reasons.

Generally speaking, if the net redemption applications of an open-end fund in a single open day exceed 10% of the total fund shares on the previous open day, it is considered that a huge redemption has occurred.

According to the provisions of the fund contract, investors with a continuous holding period of less than 7 days will be charged a redemption fee of no less than 1.5%, and the full amount of these redemption fees will be included in the fund assets. , and even some funds will charge part of the redemption fees for holding periods exceeding 7 days, which will also be included in the fund assets, so this is likely to lead to a sharp increase in the fund's single-day net value.

Because when a fund encounters a huge redemption, the cash reserves are insufficient to meet the huge redemption request, so the fund manager is forced to sell assets such as stocks or bonds, and this behavior may cause the stock price to decline. A sharp drop will eventually affect the net value of the fund.

The funds that often experience huge redemptions are basically funds with a high proportion of institutional investors and small fund sizes. Therefore, as long as you avoid these two types of funds, you can basically avoid this kind of risk. .

According to the provisions of the fund contract, the calculation of the net value of the fund share is accurate to 0.001 yuan, and the fourth decimal place is rounded off. Therefore, if a fund encounters a huge redemption, then the fund will be The accuracy of net worth calculation causes significant fluctuations in net worth.

Generally speaking, fund failures do not have much impact on the net value of the fund. After all, funds are different from stocks. They invest in multiple stocks, so they can well diversify investment risks.

However, it would be difficult to deal with if many of the fund's heavyweight stocks are hit by thunderstorms, especially if the stocks or bonds that are hit by thunderstorms are suspended from trading, and the fund size is small.

For example, LeTV’s stock price was 15.33 yuan when trading was suspended on April 16, 2017. However, when trading resumed on January 24, 2018, it was 11 lower than the daily limit.

So many funds that still hold LeTV (due to the suspension of trading and cannot sell) have continuously lowered their valuations during the 9 months during which LeTV was suspended, and some funds even lowered their valuations. At 3.91 yuan, compared with the 15.33 yuan when trading was suspended, that is 13 lower limits!