Can you get your money back in fund liquidation
Fund liquidation is a mechanism that triggers the liquidation of a fund when the fund falls to a certain percentage, and fund liquidation, also known as fund liquidation, is the liquidation of fund property by the fund manager in accordance with the provisions of the contract or due to termination of legal causes. So can you get your money back if the fund is wound up? One to understand the fund liquidation money can still get back?
Fund liquidation money can still get back?
Fund liquidation money can still get back, but can not ensure that the money invested in the fund all back. In general, the fund liquidation is the fund assets will be dealt with, the fund assets will be all realized, and then in accordance with the proportion of a certain amount of money will be distributed to the original fund holders. Therefore, how much money can be returned from fund liquidation mainly depends on the liquidation of fund assets and the agreed ratio. In fact, when a fund reaches the point of liquidation, it will cause some losses to investors no matter what.
For the case of fund liquidation is not the fund down means liquidation, fund liquidation is required to trigger certain conditions, as follows:
1 field fund price below 0.3 yuan reached the liquidation line, the fund will be facing the possibility of liquidation delisting.
2 The fund will face liquidation when its total assets fall below 50 million yuan for 20 consecutive trading days.
3The fund will face liquidation if the number of shareholders is less than 200 for 20 consecutive business days.
4For closed-end funds, the fund will be wound up when the fund manager does not apply for an extension of the duration at the end of the term.
Retailer money is returned when a fund is wound up.
After the fund is wound up, investors can wait for the liquidation settlement, when the fund company will return the money to investors in accordance with the net value of the fund, but the amount of money to the account of the time will be longer, usually need two or three months or even longer time. For investors, investing money during this time is tantamount to being trapped and unable to get any expected returns.
Fund liquidation is when a fund manager realizes all of the fund's assets and returns the proceeds in cash to the holders. Fund liquidation can be interpreted as the mandatory redemption of fund shares, but is not equivalent to the loss of invested money.
Fund liquidation is divided into a variety of circumstances, in addition to the maturity of the liquidation, the extension of the liquidation, and early liquidation. There are also multiple reasons that lead to the liquidation of a fund, with the size of the fund falling below the legal standard being the most direct reason. When the expected return of the fund is poor, it is easy for investors to concentrate on redemption, which in turn leads to a significant shrinkage of the fund size. Generally speaking, smaller funds may be at risk of liquidation.
In short, it is the investment risk that is to be borne, the opportunity cost of this money, because this money if you can get it back earlier, you can invest in something else. But there will be no risk of default, that is, one's money will not be misappropriated. So from that point of view, this model of fund is still a safe way to invest. Liquidation is safe only in terms of default risk, it does not guarantee that the investment will not lose money.
So if the fund is really wound up, just wait quietly, the money will come back sooner or later, unless you buy a fake fund.
So what's the deal with fund liquidation?
Fund liquidation is actually the process of first realizing all the assets of a fund and then distributing all the realized money to the fund shareholders.
Simply put, it means that all the money people put together to build the fund in the first place is exchanged for cash and returned to them, but the process doesn't necessarily result in losses. So people shouldn't worry too much about the fund they bought being wound up.
So why are funds wound up? Generally speaking, there are four situations in which a fund will be wound up: winding up at the end of the operational period, triggered winding up, voting winding up and compliance winding up.
The reason for the expiration of the operating period is very simple, that is, the fund contract expires, all the shares of the natural maturity of the realization back to the fund holders.
Triggered liquidation, generally because the fund does not meet the relevant provisions, triggering the rules of liquidation, so forced to liquidate.
For example, the liquidation rules, 60 consecutive days of the fund net asset value of less than 50 million, the fund retracement of 20% and so on. Anyone who touches the relevant rules will either be forced to wind up or will need a vote at a general meeting of holders before making a decision.
There is also voting for liquidation, which is when fund holders convene a general meeting to vote on whether the fund should be wound up.
Compliant liquidation, where the fund fails to meet regulatory requirements and is forced to wind up.
What kind of impact will a fund winding up have on us? There are only two outcomes, either you make a profit or you lose money.
If the net value of the fund you held was above your buying cost on the last day before the liquidation, you made a profit, and vice versa you lost money.
So what other choices are available to us when a fund is wound up?
We have the option of switching to another product from the same fund house, as the liquidation process takes a long time and money is locked up during the liquidation process.
To combat this, switching to other products from the same fund house can avoid money sitting idle, and the same fund house will usually waive the extra subscription fees.
There is also early redemption, fund liquidation will generally be issued 30 days in advance of the announcement, in the time period before the liquidation of the fund can be redeemed, early redemption can be convenient and fast access to the principal.
The last is to wait patiently for the liquidation to get back the principal, then if we are more Buddhist, you can wait for the fund to be liquidated and then get back the principal, but this way you need to bear the cost of liquidation, and the funds during the liquidation period will only enjoy the interest rate of demand deposits, so this method is generally not recommended.
It is foreseeable that fund liquidation will become more common in the future.
For the market, this is a process of survival of the fittest, the fund with excellent performance will survive and continue to grow in size, while the fund with poor performance will be eliminated from the game, and we have to look at fund liquidation rationally.