A silver fund run by UBS’s Chinese partner has drawn a wave of complaints from investors. The grievances have been sparked by a decision to change benchmarks, a move that has reportedly resulted in greater losses than investors had anticipated.
Over 200,000 individuals have raised concerns against UBS’s domestic Chinese partnership with the state-controlled SDIC Group. The objections are primarily focused on UBS SDIC Fund Management’s decision to alter the valuation mark for the UBS SDIC Silver Futures Fund LOF. The company shifted from Shanghai Futures Exchange settlement prices to international market prices without giving investors prior notice. It is thought that this change transformed losses from an expected cap of 17 percent, due to a daily price limit, to over 31 percent.
This alteration took place during a significant collapse in silver prices on January 30, which saw the value of the precious metal plummet by over 30 percent. In response to this situation, the company formed a task force and subsequently announced a compensation plan for investors who redeemed their investments on February 2.
What caused the wave of complaints against UBS’s Chinese partner?
Investors were unhappy with UBS SDIC Fund Management’s decision to switch the valuation mark for the UBS SDIC Silver Futures Fund LOF from Shanghai Futures Exchange settlement prices to international market prices without any prior notice.
What was the impact of the benchmark switch on investors?
The change is believed to have amplified losses from an anticipated cap of 17 percent due to a daily price limit, to an actual loss of over 31 percent.
What measures did the company take in response to the silver price crash?
In response to the silver price crash and the resulting investor complaints, the company formed a task force and announced a compensation plan for investors who redeemed their investments on February 2.
