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What a disaster! This private fund made a massive bet on crude oil declining, and its net value crashed 27% in a single month, turning it into a 60-cent fund.

What a catastrophe. Just eight months after launch, the fund's net value has plunged 36%, relegating it to 60-cent fund status. Its practical investment capability is arguably far inferior to that of an average retail investor. This product is the Critical Series fund under Senn Asset Management.

Looking at the net value, since September 4, this product has frequently experienced massive single-week drops of 10%. In just one month, the net value fell from 0.88 to 0.64, a plunge of 27% in a single month.

According to association information, Senn is a small private fund manager with assets between 0 and 500 million yuan, registered in 2016 and operating for over 10 years now. The chairman and actual controller is Qiu Yu, who previously served as a client manager at a brokerage branch, then as a wealth manager at CITIC Securities, entered the private fund industry in 2013, and founded Senn Asset Management in 2016.

It is worth noting that even the STAR 50 Index fell less than 10% in September. What exactly did this product buy? According to its introduction, the product is a commodity options product. And according to an apology letter provided by investors, this product heavily bet on crude oil options.

You might ask, didn't crude oil surge 13% in September? How did Senn's net value suffer such a massive drawdown? The key lies in the fact that Senn bought sold call options on crude oil. The core logic is that as the option seller, you collect the premium paid by the buyer upfront, while bearing the obligation to deliver the underlying asset to the counterparty at the agreed strike price when the buyer exercises the option. Generally, selling call options means believing crude oil will not rise in the future, or may even decline slightly, and at least won't surge, allowing you to steadily collect the premium at expiration. However, if crude oil surges, Senn faces spread losses, with limited profit potential but unlimited loss potential.

According to the apology letter, Senn held sold call options on crude oil 2010 and 2011 contracts — this is likely a typo and should be 2610 and 2611 contracts — at prices of 570 yuan and 630 yuan respectively. Based on the prices, Senn purchased the crude oil options around September 2.

Reality is indeed cruel. After Senn sold the call options, crude oil skyrocketed, especially with a single-day surge of 8% on September 12. Behind September's crude oil rally was the core factor of continuously escalating Middle East tensions. On August 30, the U.S. launched airstrikes on Iran; on September 10, the core section of Saudi Arabia's East-West oil pipeline — a key alternative transportation route when the Strait of Hormuz is blocked — was attacked multiple times and forced to close preventively; on the 11th, Houthi forces seized Perim Island, a core strategic location in the Bab-el-Mandeb Strait, directly controlling the throat of Red Sea shipping; on the 13th, a Gulf state meeting originally planned to discuss temporary safe routes through the Strait of Hormuz was announced to be postponed. More seriously, Saudi Arabia's daily crude oil production in August had already fallen to its lowest level since 1990; Kuwait, the UAE, and other oil-producing countries cut production; U.S. crude oil inventories, including strategic reserves, decreased by over 7 million barrels last week, and the low inventory situation greatly amplified price elasticity.

Based on the 2611 crude oil contract entry price of 630 yuan, Senn liquidated its position at crude oil's peak on September 16. Assuming a premium of 5 yuan, one contract could lose 850-630-5=215, multiplied by 1000, equaling 215,000 yuan.

On September 16, at the peak of crude oil's rally, Senn liquidated its crude oil options, precisely missing the net value recovery that the subsequent oil price decline would have brought. Starting September 16, crude oil plummeted 16.8% over five trading days.

After liquidating the crude oil options, starting September 17, Senn retained only the CTA strategy portion. The CTA strategy relies entirely on a long-short bidirectional trading mechanism to profit: regardless of whether the underlying price rises or falls, as long as a clear trend emerges, it can capture returns by opening positions in the direction of the trend. Unlike equity strategies, it does not need to depend solely on price increases to make money. The net value trajectory of CTA strategies shows pulse-like gains, maintaining sideways movement or slight drawdowns most of the time. Once a major trend emerges in the market, returns are concentrated and realized — capturing the fat tail行情 can cover the fluctuations of most of the preceding period.

The CTA strategy primarily revolves around commodity futures, stock index futures, treasury bond futures, and other futures instruments. In one-sided market conditions, it is easier to achieve excess returns — for example, in a crude oil downtrend, profiting through short selling. However, judging from the net value performance over the past two weeks, Senn's CTA strategy has not shown significant improvement, and the product's net value has continued to hit new lows.

The same applies to other products in the Senn series — all net values are underwater. Another fund established in July 2025 has lost 17% this year, also becoming a 60-cent fund. Another has lost 16% this year and is an 80-cent fund. Looking at the declines, they all sold crude oil call options and were crushed by the market.

The fund manager of all three products is Dong Yuchen, who is also the company's investment director. All products under his management have suffered heavy losses. The Senn Critical fund he began managing in September 2023 still shows a cumulative return approaching double, but looking at this year's performance: January returns were astonishing at 30%, but since February, monthly net value has repeatedly dropped over 15%, and in September the net value fell 22%.

Therefore, for those buying private funds, the advice is to focus on large private fund managers, especially those managing over 10 billion yuan. Small private funds, due to performance pressure or the fund manager's personal capabilities, may occasionally produce explosive short-term results, but they also decline faster. Once violations occur, they may even face liquidation.

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