Home / Business and Economy / China Silver Fund Plunges 31% After Valuation Shift
China Silver Fund Plunges 31% After Valuation Shift
3 Feb
Summary
- China's sole silver fund experienced a record 31% daily decline.
- A new valuation method now tracks global silver futures prices.
- Investor backlash grew amid a significant metals market downturn.
China's sole pure-play silver fund suffered a historic 31.5% single-day plunge in its net asset value. This dramatic decline occurred after its manager, UBS SDIC Fund Management Co., revised the fund's valuation model. The adjustment, effective recently, now references silver futures prices on major global markets instead of the Shanghai Futures Exchange.
The previous valuation model, which used Shanghai-listed futures with a 17% daily price limit, could not fully capture sharper global price fluctuations. This change has led to significant investor criticism, particularly as the fund had attracted substantial retail inflows during a recent precious metals rally, trading at a premium to its NAV. Regulators have since urged institutions to enhance risk controls and advise investors to trade rationally.
