A silent corporate death occurred last month when a notarized vote count by the Shanghai Oriental Notary Public Office declared the end of the UBS SDIC Xinxiang Flexible Allocation Mixed Fund. The liquidation report, published on September 15th, drew no protests, no legal battles, and barely any public notice, despite the fund's once-illustrious status.

Launched in April 2015 during the peak of a bull market frenzy, the fund attracted net subscriptions of RMB 6.99 billion from 1,619 valid accounts. Eleven years later, as of June 30, 2026, its Class A shares held net assets of RMB 8.246 million and Class C shares held RMB 3.127 million, totaling approximately RMB 11.37 million. By its final day of operation, net assets had dwindled to just RMB 10.8766 million.

Under the 1.5% management fee rate, RMB 11.37 million in net assets generates only hundreds of thousands of yuan annually, not enough to cover even one fund manager's salary. At its peak, the RMB 6.99 billion fund contributed over RMB 100 million per year in management fees. A fund that couldn't keep pace with the bull market or outperform its peers had no reason to remain.

The Death List of an 11-Year-Old Fund

The fund's unitholder meeting was conducted through written correspondence, with the 5.7973 million units participating voting 100% in favor, with no opposition or abstentions, passing the resolution to terminate the fund contract. The following day, this fund with its 11-year, 3-month history entered the liquidation phase, with its clearance report published on September 14th.

It was once a flagship product. From April 21-23, 2015, at the height of market euphoria, it completed its offering with RMB 6.999 billion in net subscriptions from 1,619 valid accounts. KPMG Huazhen verified the capital, with SPD Bank serving as custodian. Just two months after its April 28, 2015 establishment, the product peaked at RMB 8.172 billion by end-June that year, before plummeting 81.86% to RMB 1.482 billion by end-September. By year-end, it had shrunk further to RMB 107 million.

The decline didn't stop there. A recovery attempt in 2016 lifted assets to RMB 474 million by year-end, but the fund subsequently reversed course again, failing to reverse its trajectory for nine years, with assets languishing below RMB 50 million for extended periods. Eleven years later, its size had contracted 99.84% from its launch figure, and although classified as an equity fund, its top ten holdings accounted for just 7.26% of net asset value, including BYD at 1.05%, Anker Innovations at 0.81%, and King Long Motor Group at 0.74%.

Wind data shows that as of its final trading day, the fund's one-year return was 0.38%, while the CSI 300 gained 14.54% and comparable funds averaged 16.61% over the same period, ranking it 1,782nd out of 2,274 peers. A fund that lags both the market and its category, a shell fund, was destined to be removed from the market. But after this downsizing, who takes over the baton? Where do the resources and energy freed up by liquidating 12 old funds flow?

12 Fund Liquidations in One Year: Aging Shells Systematically Removed

Wind data reveals that in the year through September 15th, 361 products were liquidated across the public fund market, the highest number since 2019. Among these, UBS SDIC Fund Management liquidated 12 funds, placing it near the top of the industry, second only to Bosera and Huaan's 17 each. The liquidated products included 5 pure bond funds, 4 flexible allocation funds, and 3 hybrid debt funds.

All four liquidated flexible allocation funds were cleared in 2026. Beyond the Xinxiang fund, these included the UBS SDIC Tianxin, UBS SDIC Tongying, and UBS SDIC Xinjingxuan, all over 10 years old, with the first two launched in 2015 and the latter two in 2014. The UBS SDIC Tongying cleared on April 13, 2026, with only 4.579 million units and net assets of approximately RMB 6 million on its final day. Its Q1 2026 net asset value growth rate was -0.47%.

The UBS SDIC Tianxin cleared on June 2, 2026, holding 14.17 million units and around RMB 16.74 million in net assets, with a one-year net value growth of just 1.52% versus the CSI 300's 27.98%. The UBS SDIC Xinjingxuan maintained assets below RMB 50 million before its August 10, 2026 liquidation. At end-Q1 2026, its growth rate was -3.79%, trailing its benchmark, and at end-Q2 2026, it posted -5.26%, underperforming its benchmark by 15 percentage points.

These four funds also employed strikingly similar strategies, all based on a 50% CSI 300 plus 50% Treasury bond allocation or similar equity-debt balancing approaches. The liquidations stem from poor benchmark-relative performance and substandard scale, rendering the shell funds valueless, combined with proactive clearing under stricter regulation where shell resources have lost their utility. Previously, fund companies retained mini funds as potential vehicles for future transformations, but with heightened regulatory requirements for ongoing operations and improved holder meeting and liquidation mechanisms, maintaining these long-idle funds with minimal holders now generates unnecessary information disclosure, audit, and account maintenance costs. For instance, since June 2024, the UBS SDIC Xinjingxuan's disclosure, audit, and account maintenance fees have been absorbed by the company itself.

Considering the broader picture, UBS SDIC Fund Management reported RMB 514 million in 2025 operating revenue, down 12.3% year-over-year, with net profit of RMB 98 million, down 29.5%. Liquidating these "white elephants" is part of a strategic effort to streamline and focus resources.

An Established Fund Manager's Transformation Challenge

Founded in April 2003, UBS SDIC Fund Management was the first Sino-foreign joint venture fund company approved in mainland China, originally owned by Guotai Junan Securities and Germany's Allianz Group with 51% and 49% stakes respectively. In 2018, Guotai Junan transferred its entire stake to Pacific Asset Management under China Pacific Insurance (Group), following regulatory approval.

However, Allianz's 49% stake has found a buyer. In September 2023, Guotai Junan signed a share transfer agreement with Allianz to acquire the latter's 49% interest in UBS SDIC Fund Management. Upon completion, the original plan would have created a structure with Pacific Asset Management holding 51% and Guotai Junan holding 49%. The problem is that this transaction remains uncompleted, having been suspended for nearly three years. Meanwhile, following the merger of Guotai Junan and Haitong Securities into Guotai Haitong, the regulatory constraint of "one control, one participation, one license" has introduced new uncertainties for the new entity's involvement.

Allianz's position also appears clear: having established its wholly-owned public fund subsidiary Allianz Fund, fully controlled by Allianz Global Investors and approved for operations in April 2024 as China's ninth wholly foreign-owned public fund company, retaining the 49% stake in UBS SDIC would represent both a conflict of interest and a strategic redundancy. Would a foreign shareholder preparing to exit continue investing cross-border resources?

Wind data shows that as of mid-2026, UBS SDIC Fund Management's assets under management reached RMB 145.307 billion, up 16.8% from the start of the year, setting a new record in its 23-year history. It manages 81 funds with 27 fund managers. The product mix is dominated by fixed income, totaling RMB 85.605 billion, comprising RMB 52.644 billion in bond funds and RMB 32.96 billion in money market funds. Equity funds total RMB 59.579 billion, including RMB 44.937 billion in stock funds and RMB 14.642 billion in mixed funds.

In terms of performance, the company posted RMB 276 million in H1 operating revenue, up 8.24% year-over-year, with net profit of RMB 58 million, up 1.75%. ETFs represent one of the company's key strategic focuses. As of end-June 2026, its 12 ETF products held RMB 32.813 billion in assets, growing RMB 5.608 billion in six months from RMB 27.205 billion at end-2025. As early as end-2020, this product line had already surpassed RMB 10 billion, reaching RMB 12.289 billion.

The company's largest flagship product is the UBS SDIC Semiconductor ETF, one of the earliest on-exchange index funds targeting the semiconductor sector. Launched in May 2019 and listed on June 12 of that year, managed by Huang Xin and Zhang Zhenyuan, it has achieved a cumulative adjusted unit net value growth of 285.6% since inception. At launch, the fund held just RMB 313 million, but has expanded significantly alongside semiconductor sector cycles and sustained capital inflows. By end-June 2026, its net asset value reached RMB 25.406 billion, with unit net value growth of 104.14% in H1 and profits of RMB 14.701 billion.

According to its H1 2026 holdings report, the fund's largest position was Gigadevice Semiconductor Inc. (603986.SH), holding 2.4385 million shares representing 7.82% of net assets. Cambricon Technologies, which held the top spot at end-2025, became the second-largest holding. This doubling-level return primarily resulted from the semiconductor sector's surge, with the tracked CSI All-Share Semiconductor Index rising 105.08% in H1, and the fund maintaining tight tracking to its benchmark.

When the sector corrects, however, it amplifies the downside. The fund's assets declined in Q3 as the semiconductor sector pulled back, with one-month and three-month returns turning negative, and assets falling from their peak to the RMB 19-21 billion range. That said, its concentration in a single sector and the product's outsized dominance expose performance and scale to significant semiconductor volatility. Beyond this, as of September 15th, the remaining 11 ETFs at UBS SDIC collectively held less than RMB 10 billion. The UBS SDIC CSI 300 ETF and UBS SDIC CSI A500 Dividend Low Volatility ETF each exceeded RMB 1 billion at RMB 2.457 billion and RMB 1.191 billion respectively, while the UBS SDIC ChiNext Technology ETF, UBS SDIC CSI A500 Enhanced Strategy ETF, and UBS SDIC CSI Consumer 50 ETF all fell below RMB 50 million.

From a strategic perspective, dividend ETFs represent the company's next bet. On September 3, 2026, the CSRC published that the registration application for the UBS SDIC S&P China A Dividend 100 ETF had been received, representing an effort to align with market trends and refine the product lineup. However, 81 dividend ETFs already exist in this market, concentrated among leaders, with Huatai-PineBridge Dividend Low Volatility at RMB 31.3 billion, Southern S&P Large Cap Dividend Low Volatility 50 at RMB 20 billion, Huatai-PineBridge SSE Dividend at RMB 19.2 billion, and E Fund CSI Dividend at RMB 18.1 billion. In this fiercely competitive dividend track, UBS SDIC's success depends on its distribution capabilities, product differentiation, and sustained operational investment.

The 11-year Xinxiang fund died from shrinking scale, but a company's vitality cannot rely solely on the fortunes of a single semiconductor ETF. Liquidation is an amputation; whether a new limb grows afterward is the real answer to who takes over the baton.