UBS China JV Hit by Silver Fund Protest
Thousands of investors in a silver fund operated by UBS’ China joint venture have lodged complaints over a decision to switch benchmarks, which led to higher losses than expected.
More than 200,000 people have lodged complaints against UBS’ onshore China joint venture with state-owned SDIC Group, according to Xiaofei Bao, an online Chinese consumer protection platform.
The complaint is centered around UBS SDIC Fund Management’s decision to switch the valuation mark for UBS SDIC Silver Futures Fund LOF from Shanghai Futures Exchange settlement prices to international market prices without prior notice. The decision is believed to have turned losses from the expected 17 percent cap due to a daily price limit to more than 31 percent.
The switch occurred in the midst of a silver crash on January 30, which saw the precious metal drop more than 30 percent. After forming a task force, the firm announced a compensation plan for investors who redeemed on February 2.
