Liquidation wave rises again, a group of public offering FOFs face a major test approaching.

As of May 18th, at least 7 mutual fund FOFs have issued indicative announcements of possible liquidation within the month. In addition to the 6 that have already liquidated this year, the number of FOFs liquidating continues to increase. Specifically, the reasons for the liquidation of actively managed FOFs are all due to insufficient assets under management of less than 200 million yuan after three years of establishment, while the risk warning reasons for open-ended FOF products are all due to assets under management being below 50 million yuan for 20 consecutive working days. In addition, some products have outperformed benchmarks in terms of performance but have also had difficulty growing their size, leading to a "regrettable closure". According to analysis, the long-term volatility in the equity market is the main factor contributing to the shrinkage of FOF assets, and factors such as an accelerated rotation in the equity market have a significant short-term impact on FOF products with a bias towards allocation strategies.