1, closed-end fund expires. Closed-end funds generally have a duration, and they will be liquidated if they do not extend their duration after expiration. However, closing the position at this time does not mean that the fund has investment losses, but may have made money.

Because closed-end funds need to be liquidated at maturity, the principal and investment income will be returned to investors, so as long as the fund has no investment losses, liquidation will not cause losses to investors.

2. Open-end funds meet the liquidation conditions. Open-end funds have no fixed term, so there is no such thing as liquidation at maturity. However, there are two liquidation conditions for open-end funds. One is that the net value of the fund is less than 50 million for 20 consecutive working days, and the other is that the number of fund holders is less than 200 for 20 consecutive working days.

3. The scale of new fund raising is not up to standard. Whether it is a closed-end fund or an open-end fund, there is a minimum size at the time of initial public offering, which is generally 50 million.

If it does not reach the scale, it means that the fund has failed to issue and needs liquidation. However, in this case, the fund company, as the fund sponsor, not only needs to return the investor's principal in full, but also needs to pay the interest of the funds during the fundraising period. Therefore, investors will not lose anything in liquidation.

Extended data

Open-end funds generally do not stipulate their own duration, but in some cases, open-end funds can make liquidation decisions and end their existence through the liquidation and distribution of fund assets.

Overseas, there are several situations in which open-end funds need to be liquidated:

According to the provisions of the fund contract or the articles of association

According to Taiwan Province Province, the reasons for trust deed's termination of securities investment shall conform to the stipulations of trust deed's securities investment, unless otherwise stipulated by laws and regulations.

The resolution of the holders' meeting or shareholders' meeting is adopted.

According to British regulations, open-end funds can be liquidated by special resolution. The liquidation of open-end funds in Hong Kong also needs the resolution of the holders' meeting.

The competent authority cancels the open-end fund license.

① According to the written application of the fund manager. According to British regulations, the authorized directors of fund managers apply to the Financial Services Authority (FSA) for cancellation of authorization, and with the consent of FSA, open-end funds can be liquidated.

② Inappropriate establishment or becoming inappropriate. According to Dutch regulations, the Ministry of Finance may revoke the license if it finds that the original application materials are wrong or incomplete or the application for establishment under the same conditions will be rejected due to changes in circumstances.

③ Fund managers and custodians no longer meet the statutory requirements. South Korea stipulates that trust deed can be abolished when the entrusting club (fund manager) is disqualified or dissolved, but it has not been handed over to the Minister of Finance.

④ Based on public welfare or beneficiary's interests. Taiwan Province area stipulates that if it is appropriate to terminate trust deed's securities investment for public welfare or beneficiary's benefit, China Securities Regulatory Commission may order it to be terminated.

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