Silver LOF: 90% of investors are fully compensated. How much does the fund company need to pay?

Before the Spring Festival, Guotou Ruixin Fund issued an announcement regarding the Silver Fund-related plan. To address the valuation adjustments caused by historic extreme market conditions in the silver market for its Guotou Ruixin Silver Futures Securities Investment Fund (LOF), a special work plan was launched, and over 90% of investors will receive full compensation.

So, how much will the fund company pay in total? And what impact will it have?

The Daily Economic News reporter noted that the latest announcement from Guotou Ruixin’s actual controller, Guotou Investment, revealed relevant information.

The announcement states that the impact amount from this plan is less than 5% of Guotou Investment’s audited net profit attributable to shareholders in 2024, which is 2.694 billion yuan. Industry insiders, based on Guotou Investment’s equity holdings in Guotou Ruixin Fund, estimate that the maximum compensation payable could reach about 433 million yuan.

Looking at the revenue of Guotou Ruixin Fund over the past few years, the (consolidated) operating income for 2022, 2023, and 2024 was 1.255 billion yuan, 1.42 billion yuan, and 1.379 billion yuan, respectively, with net profits of 163 million yuan, 346 million yuan, and 376 million yuan. The consolidated net profit for the first half of 2025 was 149 million yuan. Compared to its recent profitability levels, this compensation effort is notably significant.

Because of this, industry experts have commented that this special plan fully demonstrates the sincerity and determination of Guotou Ruixin and its shareholders.

How much will Guotou Ruixin pay? The actual controller’s announcement is here

The core calculation basis for this compensation amount comes from Guotou Investment’s announcement released on February 23 (dated February 24).

The announcement clearly states that the Silver LOF compensation plan for Guotou Ruixin Fund is expected to have a negative impact on Guotou Investment’s net profit attributable to shareholders in 2026, not exceeding 5% of its audited net profit attributable to shareholders in 2024, and will not have a substantial impact on the company’s overall business development.

According to Guotou Investment’s 2024 annual report, the audited net profit attributable to shareholders was 2.694 billion yuan. Based on this, the maximum impact of this plan at the consolidated report level is approximately 134.7 million yuan. To estimate the amount Guotou Ruixin Fund needs to compensate, its equity structure must be considered.

Public information shows that Guotou Ruixin is a third-level subsidiary of Guotou Investment, which is under China Reform Holdings Corporation Limited. Guotou Investment, through its wholly owned subsidiary Guotou Investment Holding, owns 61.29% of Guotou Taikang Trust, which in turn holds 51% of Guotou Ruixin Fund, making it the controlling shareholder.

Industry insiders have calculated based on the transparent equity structure that the maximum compensation Guotou Ruixin Fund would need to bear is about 433 million yuan. It’s important to note that this figure is based on the theoretical maximum; the final amount should be determined by the company’s actual data.

Reviewing the recent revenue and net profit of Guotou Ruixin Fund, the reporter summarized as follows:

From recent performance, the (consolidated) operating income of Guotou Ruixin Fund from 2020 to 2024 was 798 million yuan, 997 million yuan, 1.255 billion yuan, 1.42 billion yuan, and 1.379 billion yuan, respectively. The net profits were 216 million yuan, not listed, 163 million yuan, 346 million yuan, and 376 million yuan. Using the maximum estimate, the compensation amount would be nearly one-third of the company’s 2024 revenue and exceed its annual net profit, demonstrating strong investor protection efforts.

Protecting the legitimate rights and interests of small and medium investors with efficient online procedures

Let’s review the special plan released by Guotou Ruixin earlier this year.

Previously, due to historic extreme market conditions in the silver market, Guotou Ruixin Fund adjusted the valuation of its Silver LOF to fairly treat all investors and prevent “first redemption advantage.” The related announcement drew significant investor attention.

On February 15, just before the Spring Festival, Guotou Ruixin announced the industry’s first compensation plan. For the Silver LOF, a tiered compensation approach was adopted to fully cover affected individual investors, with a focus on protecting small and medium investors, allowing each investor to directly compare their situation and confirm their compensation amount.

The compensation rules are based on a clear tiered model:

1. For individual investors with valuation adjustment impacts (ranging from -17% to -31.5%) of 1,000 yuan or less, the full amount of the impact will be used as the settlement amount.

2. For impacts exceeding 1,000 yuan (including 1,000 yuan), the total settlement amount is calculated by adding 1,000 yuan plus the excess amount multiplied by a certain ratio.

This design is based on data analysis: larger investments tend to profit more during the early rise of the product, and valuation adjustments have a relatively limited actual impact on them. The tiered approach ensures fairness while prioritizing protection for small and medium investors with weaker risk resistance.

The scope of applicability is also precisely defined: only natural persons who submit redemption requests and confirm during the period from after market close on January 30, 2026, to before market close on February 2, 2026, are included. Institutional investors, due to their stronger professional capabilities and risk tolerance, are excluded, ensuring resources are focused on ordinary investors.

The sincerity is also reflected in the efficiency of implementation. The reporter learned that the dedicated compensation mini-program developed in cooperation with Alipay has been completed and will be officially launched on February 26. Investors can simply search “Guotou Ruixin Silver Fund” mini-program on Alipay, verify their identity as prompted, and follow the instructions to complete the process online. The compensation funds will be quickly transferred, minimizing the effort and cost for investors.

This announcement from Guotou Investment also shows the high importance placed by shareholders on protecting investors’ rights and interests, along with full financial support.

Because of this, industry professionals believe that the coverage, compensation ratio, and implementation speed of this plan are among the best in the securities and fund industry and even the broader financial sector, fully demonstrating the fund company’s proactive response to investor demands and its responsibility to safeguard small and medium investors’ rights.

Source: Daily Economic News

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