"Internet Celebrity Fund" plummeted 31.5% in a single day. What happened?

On February 2nd, the China Universal Silver Futures LOF's net asset value dropped over 31 overnight, setting a record for the largest single-day decline among public funds. The reason was that the fund company suddenly adjusted its valuation method after market close, switching from using domestic futures closing prices to referencing international silver prices for net asset value recalculation.
Why are so many investors trapped?
In 2025, silver prices surged significantly, and this fund's annual return exceeded 200%;
It is the only silver futures LOF in the market, making it scarce;
Social media platforms are flooded with "arbitrage tutorials," attracting retail investors to follow suit, with premiums once exceeding 50%.
Why did the fund company suddenly change the valuation?
The company stated that due to the domestic silver futures hitting the daily limit and price distortion, they decided to reference international prices for fair valuation. However, this change was announced after market close and retroactively took effect on the same day, causing dissatisfaction among investors.
Deeper issues to be cautious about:
1. The fund has a large scale in the silver futures market, and its rebalancing could directly impact prices;
2. The high premium of LOF funds is essentially a sentiment bubble; the higher the premium, the more painful the burst;
3. The product itself is a high-risk derivative investment but is packaged as a "white arbitrage tool," leading to a misperception of risk.
Can silver still be invested in? Opinions among institutions vary: some remain optimistic about photovoltaic demand and ample liquidity, while others warn that current prices have deviated from fundamentals and caution against a potential correction.
Lessons learned:
Avoid blindly chasing high-premium products;
Be clear about how risky the products you buy actually are;
Fund companies still have room to improve in disclosure timing and investor communication.