Reasons for fund liquidation:
First, the scale of the fund has shrunk dramatically, and the rigid maintenance cost of the fund is too high-the annual salary of the fund manager, the salary of the researcher, the custody fee, the media disclosure fee, etc. Make ends meet. At this time, it is of little significance for fund companies to maintain index funds. No one will do business at a loss.
Second, for index funds, the assessment is to examine the size of its tracking error-the smaller the error, the better the index fund. The scale of the fund is too small to buy the underlying stocks, which leads to a high probability of error in the tracking index. Due to the friction costs such as trading commission and management fee, when the fund buys stocks, it will also encounter the problem of suspension and resumption of trading of the underlying stocks, thus making the error biased. Third, the fund with severely shrunk scale has discouraged investors, and its popularity is low. There are many products managed by fund managers, and small-scale funds are naturally ignored.
1. What is the change in the size of a good fund?
Generally speaking, the scale of a good fund is rising steadily. At the same time, after reaching a certain scale, the subscription will be restricted, mainly because the plate is too big, which will drag down the performance, because when the liquidity is not good, the cost of large-scale subscription will rise a lot. Therefore, many funds will issue announcements to stop subscription.
2. What about the fixed investment after the liquidation of the fund?
First of all, fund withdrawal does not mean that there is no return, and fund companies and fund managers will not run away after fund liquidation. The money you buy the fund is entrusted by the third-party bank that the fund company finds (so there will be a trust fee in the fund cost, which will be given by the fund company to the bank that entrusted the money). If the fund is liquidated, it will be returned to you according to the actual net value. After the resolution to terminate the operation of the fund is passed, the fund will enter the liquidation procedure. Generally, within 6 months, the fund property liquidation team will complete the valuation and liquidation of the fund property. All the remaining assets after the liquidation of the fund property shall be distributed according to the proportion of the fund shares held by the fund share holders after deducting the liquidation expenses of the fund property, paying the taxes owed and paying off the fund debts, and carrying forward the unpaid accumulated income. So we don't have to worry about the situation that the liquidation can't get back the principal.