# valuation adjustment

China’s Silver LOF Implosion: How a Pricing Mismatch Turned a Rally into a Record Loss for Retail Investors

A Guotou UBS silver futures LOF plunged after a valuation adjustment that reconciled domestic futures limits with a >30% international silver selloff, producing a record single-day NAV fall of 31.5% and crystallising losses for many retail holders. The episode highlights structural mismatches between international commodity prices and domestically limited futures, the dangers of large secondary-market premiums, and the need for clearer valuation and suitability rules for retail commodity funds in China.