Currency ETFs have hit the daily limit up again, with smaller funds performing more impressively. Who exactly is speculating?

Currency ETFs are once again moving abnormally, fund companies once again warning of risks! At 2:00 pm on February 10th, several currency ETFs saw significant gains, with Golden Eagle Growth Currency ETF rising by 8.15% at one point, Rongtong Currency ETF and Guangfa Currency ETF rising by over 7%, and Guolian Riying Currency ETF rising by 4.5%. In addition, China Life Currency ETF and Huatai Tiantianjin ETF also saw varying degrees of gains. By the close of trading, Golden Eagle Growth Currency ETF hit the limit up at 9.99%, while Guolian Riying Currency ETF, China Life Currency ETF, Guangfa Currency ETF, Huatai Tiantianjin ETF, and Rongtong Currency ETF, although experiencing some retreat, still deviated significantly from their net asset value (NAV). In terms of turnover rate indicators, it is still the case that "the smaller the market size, the more volatile the performance." Nine currency ETFs in the market have turnover rates that doubled, with Rongtong Currency ETF and Guolian Riying Currency ETF reaching turnover rates of 281.28% and 259.88% respectively. The speculative trend is resurfacing, and fund companies express their helplessness. Measures such as warning of risks and suspending trading for the entire day were previously taken to curb speculation. The onshore currency fund market also experienced a significant pullback. For investors, there are significant risks hidden behind the fluctuations. Enormous risks! Currency ETFs have retraced by 17% in 7 trading days. Reviewing the movement of currency ETFs before and after the Chinese New Year: On January 24th, multiple currency funds experienced abnormal rallies, with currency ETFs collectively hitting the limit up for the first time in history. Penghua Tianli ETF, China Life Currency ETF, Guangfa Tianli Currency ETF, and Huatai Tiantianjin all hit the limit up at some point during trading. At the time, fund managers analyzed that funds in the market were buying into currency ETFs in anticipation of the holiday season, with some funds being driven by speculative motives. On January 27th, currency ETFs continued to hit limit up in the following trading days. Fund companies announced that due to the secondary market trading prices being significantly higher than the fund's NAV, there was a substantial premium, leading to a halt in the trading of 9 currency ETFs in the afternoon. Investors were cautioned to pay attention to the risk of premium pricing in the secondary market, as blind investment could lead to significant losses. By the close of trading that day, Huatai Tiantianjin ETF rose by 9.21% to reach 117 yuan, while Guangfa Currency ETF and Rongtong Currency ETF rose by over 6%, with the other 6 ETFs experiencing gains of over 3%. On February 5th, the first trading day after the Spring Festival, including Huatai Tiantianjin ETF, China Life Currency ETF, Rongtong Currency ETF, Jiashi Quick Money ETF, Guangfa Currency ETF, and 9 other currency ETFs announced a halt in trading for the entire day. Multiple fund companies issued warnings about risks. On February 6th, adjustments followed, with multiple currency ETFs opening sharply lower, with China Life Currency ETF hitting the limit down, and Rongtong Currency ETF and Jiashi Quick Money ETF dropping by 8.72% and 8.48% respectively. Guangfa Currency ETF and Guolian Riying Currency ETF also saw declines of over 7%. On February 10th, currency ETFs once again saw abnormal movements with a rise, after two days of calm trading, onshore currency ETFs once again hit the limit up. As expected, fund companies will issue warnings about the risk of premium pricing, and may even issue trading halt warnings. With mini sizes, it requires less capital to drive up market gains, and once speculative funds withdraw, a significant decline is likely to follow. Taking China Life Currency ETF as an example, within the 7 trading days from January 23rd to February 10th, it saw a gain of 0.84% but a retracement of 17.4%, with a range of 21.05%. Uninformed investors who buy at high levels could incur losses of over 10% in just a few trading days. So what funds are driving this speculation? Currently, there are indications of some funds operating around currency ETFs. There are also claims that this irrational capital may not be actively speculating but might trigger certain strategy models, possibly from quantitative private equity funds, automatically entering the market. Additionally, with smaller product sizes, onshore gains are significantly increasing. According to information gathered from multiple fund companies, on a particular day before the Chinese New Year when multiple currency ETFs hit limit up, the types of investors involved were primarily individual investors, with only one private equity fund and not a significant volume of trades. This indirectly indicates that it may not be driven by quantitative factors. To address high premiums, fund companies typically issue trading halts to allow the market to cool down. Several asset management firms believe that trading halts aim to fundamentally protect investors' interests. Short-term price fluctuations of currency ETFs are primarily influenced by market trading behavior, trading volume, and circulation size. Currently, some currency ETFs in the secondary market have prices significantly higher than their NAV, leading to a substantial premium. Investors are reminded to view market fluctuations rationally and avoid blindly chasing momentum to prevent significant losses. "The 7-day annualized return of most currency ETFs falls within the range of 1.39% to 1.73%, yet they are hitting limit up frequently, completely deviating from their NAV." Some fund companies mentioned that the profit characteristics of currency funds determine that they are not short-term speculative tools, and such blind speculation carries significant risks. Investors are advised to stay rational. This article is reproduced from "Cai Lian She", GMTEight Editor: Liu Xuan.