Valuation Tweak Wipes 31% Off China's Flagship Silver Fund

• China's UBS SDIC Silver Futures Fund LOF experienced a record 31.5% single-day collapse after revising its valuation model.
• The fund's manager changed the valuation to reference global silver futures prices instead of Shanghai Futures Exchange prices, effective Monday.
• The adjustment aimed to reflect the fund's true value, as Shanghai-listed futures with a 17% daily limit couldn't capture sharp global price swings.
• The fund, China's only pure-play silver vehicle, saw heavy retail inflows during a precious metals rally, leading to a significant premium over NAV and subsequent risk warnings.
• The collapse followed a sharp sell-off in global silver prices, with Comex futures tumbling over 30%, and has led to criticism and calls for stronger risk controls by Chinese regulators.

Why It Matters: A valuation model change caused China's silver fund to crash, exposing investors to global price volatility.