In a report released on October 6, 2026 in Epoch Times, it was revealed that due to declining profits, a significant number of mainland China public cemetery fund products have faced liquidation this year, reaching an 8-year high. Despite the continuous closure of fund products, the issue of oversupply still persists. Industry experts believe that the number of fund liquidations is expected to increase in the future and become a normal occurrence.
According to data compiled by Bloomberg on Monday, October 5th, a total of 256 public offering fund products have been subject to liquidation so far this year, marking the highest number since 2018. Among them are products from major fund companies such as Huatai Bairui and Boshi.
Additionally, about 46 products have announced the possibility of triggering the termination of fund contracts. Most of these products were triggered for reasons such as assets’ net value continuously falling below 50 million yuan, or the net value of assets falling below 200 million yuan after three years of fund establishment.
With the declining returns in the mainland fund market, investors’ enthusiasm has waned, leading many products to face redemption pressure and insufficient fund inflow.
Chen Zunde, the general manager of Guangdong Fande Investment Co., stated that products with “small scale, few investors, or continuously lagging behind in returns compared to the benchmark face high maintenance costs and are increasingly difficult to justify,” which has led to liquidation.
Recent reports from Caixin revealed that in the first half of this year, out of over 200 active equity fund products, there were situations of “doubling funds”, but after a significant decline in the performance of funds heavily invested in technology in the third quarter, only 2 “doubling funds” remain.
Active equity funds refer to public offering fund products managed by fund managers who strive to achieve excess returns beyond the market benchmark through active stock selection and timing. “Doubling funds” refer to fund products with cumulative returns exceeding 100% within a specific time frame.
Data from Wind shows that in the third quarter, funds heavily invested in technology suffered setbacks across the board, especially in the semiconductor sector. There are as many as 24 products with net value declines of over 40%, with China Aviation Superior Navigator recording the lowest net value growth rate in the third quarter at -48.29%. Other products such as Dongwu Duoce, Huaxia Xinjincheng, Dongwu Value Growth A, Dongfang Alpha Technology Optimal Selection have all seen declines exceeding 45%.
Several technology sectors in the A-share market experienced significant downturns in the third quarter. According to Shenwan Industry Classification, electronics, communication, building materials, power equipment, and mechanical equipment were among the top five sectors with declines ranging from 32.65% to 21.11%. The overall A-share market also saw significant declines, with the Shanghai Composite Index dropping by 6.16%, the Shenzhen Component Index by 12.49%, and the ChiNext Index and the STAR 50 Index by 27.80% and 30.70% respectively.
Furthermore, data from Wind indicates that in the first three quarters of this year, out of a total of 14,585 public offering funds in the market, 5770 funds had negative returns, accounting for nearly 40%. Among them, 779 funds saw declines exceeding 20%.
Some experts also believe that concerns about the artificial intelligence bubble and the expectation of a Federal Reserve rate hike are intensifying global stock market volatility, denting investor confidence in A-shares and placing additional liquidation pressure on some funds.
Despite the continuous closure of some fund products, the issue of oversupply of public offering fund products still persists. According to data from the China Fund Industry Association, by the end of August this year, the net asset value of public offering funds in China had reached nearly 40 trillion yuan, and the total number of publicly offered fund products still stood at 14,585, growing by over 10% compared to a year ago.
Mr. Zhang from Firebull Fund Intelligent Research Platform pointed out that “many newly launched funds are almost indistinguishable from existing products,” as “there are just too many similar products in the market.”
The number of public offering fund liquidations is expected to increase in the future. Wang Shan, an analyst from Morningstar (China) Fund Research Center, noted that “the three-year assessment period for short-term initiated funds will continue to be the main driver of fund liquidations, and the increase in the number of liquidations is likely to continue in the future, gradually transitioning towards a normalization of liquidations.” He added that “liquidations resulting from mini funds, homogenized products, and redemptions from institutional funds will also continue.”
According to the Securities Law, within the term of validity of an open-end fund contract, if the net asset value of the fund remains below 50 million yuan for 60 consecutive days or if the net asset value of the fund falls below 200 million yuan within three years from the effective date of the contract for the initiated fund, it will trigger the termination of the fund contract.