Currency ETFs experience abnormal movement again, warning of risks by fund management companies! On February 10th at 2:00 pm, multiple currency ETFs surged significantly again. Golden Eagle Gain Currency ETF rose by 8.15%, Rongtong Currency ETF and Guangfa Currency ETF both increased by over 7%, Guolian Riying Currency ETF rose by 4.5%. In addition, China Life Currency ETF and Huatai Day-to-Day Gold ETF also experienced varying degrees of increase. By the closing time, Golden Eagle Gain Currency ETF hit the limit up at 9.99%. Guolian Riying Currency ETF, China Life Currency ETF, Guangfa Currency ETF, Huatai Day-to-Day Gold ETF, and Rongtong Currency ETF, although saw some pullback, their increases still deviated from the net asset value. In terms of turnover rate indicators, it is still the case of "the smaller the on-exchange volume, the more erratic the performance." 9 currency ETFs on the market saw their turnover rates double, with Rongtong Currency ETF and Guolian Riying Currency ETF reaching turnover rates of 281.28% and 259.88%, respectively. The trend of speculation reemerges, with fund management companies expressing helplessness. Previously, measures were taken to warn of risks and halt trading for the whole day to curb speculation in the currency fund market, which also experienced a significant correction. For investors, there are significant risks hidden after such fluctuations. Huge risks! Seven trading days saw currency ETFs retract by 17%. Analyzing the abnormal movements of currency ETFs before and after the Spring Festival: On January 24th, multiple currency funds saw a surge, marking the first time in the history of currency ETFs that a concentrated limit up occurred. Penghua Tianli ETF, China Life Currency ETF, Guangfa Tianli Currency ETF, and Huatai Day-to-Day Gold ETF all touched the limit up at some point. At that time, some fund managers analyzed that on-exchange funds concentrated their purchases of currency fund ETFs, with some funds driven by the demand to hold cash for the festival, and speculative funds followed suit. On January 27th, in the following trading days, currency ETFs continued to hit the limit up in batches, with fund management companies announcing that due to the evident disparity between the secondary market trading prices and the fund's net asset value, there was a significant premium. As a result, 9 currency ETFs were halted in the afternoon. Investors were warned to pay attention to the risk of premium in secondary market trading prices, and if invested blindly, could incur significant losses. By the midday closing on that day, Huatai Day-to-Day Gold ETF rose by 9.21% to 117 yuan, Guangfa Currency ETF and Rongtong Currency ETF increased by over 6%, and the other six ETFs also saw increases of over 3%. On February 5th, the first trading day after the Spring Festival, including Huatai Day-to-Day Gold ETF, China Life Currency ETF, Rongtong Currency ETF, Jiashi Quick Money ETF, and Guangfa Currency ETF, 9 currency ETFs announced a halt for the whole day. Multiple fund management companies issued risk warnings. On February 6th, following the announcement, multiple currency ETFs experienced a sharp decline at the opening, with China Life Currency ETF hitting the limit down, Rongtong Currency ETF and Jiashi Quick Money ETF respectively dropping by 8.72% and 8.48%, and Guangfa Currency ETF, Guolian Riying Currency ETF, and other products also experiencing drops of over 7%. On February 10th, the abnormal movement of currency ETFs surged again after two calm trading days. It is not surprising that fund management companies will once again issue warnings about the risk of premium, and may even issue halt warnings. With a mini size, it requires relatively small capital to drive up on-exchange increases, but once speculative funds retreat, significant drops will follow. Taking China Life Currency ETF as an example, within the 7 trading days from January 23rd to February 10th, its increase was 0.84%, but retracted by 17.4%, with a fluctuation rate of 21.05%. For uninformed investors buying at the peak, losses within a few trading days could exceed 10%. What kind of funds is involved in the speculation? Currently, some funds in the market seem to be operating around currency ETFs. Recently, some have suggested that this irrational fund may not actively speculate, as seen from the operation tactics, which may have triggered certain strategies like quantitative private placements automatically buying in. Coupled with the relatively small product size, the on-exchange increase is significantly boosted. According to several fund management companies interviewed by Cailianshe, taking a day when multiple currency ETFs saw limit ups before the Spring Festival as an example, the investor behavior was mainly dominated by individual investors, with only one private placement fund, and the trading volume was not significant. This indirectly confirms that it is not driven by quantitative trading. To address high premiums, fund management companies generally opt for halting trading, using the "circuit breaker" method to calm the market funds. Multiple interviewed asset management institutions believe that halting trading aims to fundamentally protect the interests of investors. The short-term price fluctuations of currency ETFs are mainly influenced by market trading behavior, trading volume, and the size of the float. Currently, the secondary market prices of some currency ETFs have significantly exceeded their net asset value, forming significant premiums. Investors are reminded to adopt a rational view towards market fluctuations and avoid blindly chasing highs to prevent substantial losses. "The 7-day annualized return rate of currency ETFs mostly falls within the range of 1.39%-1.73%, while the frequent limit ups on the exchange have completely deviated from their net asset value." says a fund company. The profit characteristics of currency funds determine that they are not short-term speculative tools, and such blind speculation entails great risks. Investors are advised to stay rational. This article was originally published on "Cailianshe", GMTEight Editor: Liu Xuan.