Fund liquidation refers to the realization of all fund assets and the distribution of income to holders. For ordinary open-end funds, in some cases, the fund may make a liquidation decision and end its existence through liquidation and distribution of fund assets.

The main reasons for fund liquidation are insufficient scale, fund transformation and fund holders' meeting agreeing to terminate.

Among so many reasons for liquidation, voluntary liquidation is the main reason for the fund holders' meeting to agree to terminate liquidation. Among the funds that have agreed to terminate liquidation through the fund holders' meeting, small-scale funds are the main ones, and there are many typical mini-funds.

Mini-fund has always been the main type of fund liquidation, so we can try our best to avoid choosing some funds with too small scale to avoid liquidation risk, and the funds with the fund size below 1 100 million yuan should be carefully selected.

How to avoid choosing a fund with liquidation risk?

Avoid too small funds. Generally speaking, funds with a fund size below 1 100 million should be vigilant. Cautious investors generally choose funds with a fund size of 1 100 million or more. The bigger the fund, the better. After the fund scale reaches a certain level, the more difficult it is to manage, which will affect the performance of the fund.

In a fund, if the proportion of institutional funds is too large, especially over 90%, we should also be cautious, because once the institution redeems, the fund will be very dangerous, which may lead to a cliff-like decline in the size of the fund.