China Construction Bank Fund Price Falls After `Massive' Outflowby
The price of a mutual fund managed by a unit of China Construction Bank Corp. fell by more than two-thirds in one day as investors rushed for the exit.
The unit price of the Jianxin Xinfeng C fund fell to 0.337 yuan Friday from 1.039 yuan on Thursday because of a "massive redemption," its manager, CCB Principal Asset Management, said in a statement Monday. Those who redeemed were paid a per-unit rate rounded to the third digit after the decimal point and above fair value, leaving the remaining investors with a loss, CCB Principal said in the filing to Cninfo.com.cn, the website designated for disclosures by the China Securities Regulatory Commission.
Rounding to the thousandth place is widely used in China to calculate funds’ net asset value per unit, according to prospectuses of mutual funds. CCB Principal said its rounding method was in accordance with rules and regulations. The fund manager said it would "protect the interests of unit holders," without elaborating.
CCB Principal didn’t immediately respond to a call to its offices in Beijing outside of normal business hours.
Jianxin Xinfeng C had 1.7 billion yuan ($258 million) of assets as of the end of December, according to CCB Principal’s website. Its stock portfolio consisted of eight companies that went public in December and January, the website shows.