Due to persistently high premium rates, after a full-day trading halt on January 22, the SDIC Silver LOF announced another suspension of on-exchange trading on the evening of January 22, stating it would be halted from market open until 10:30 on January 23, 2026.
Accompanying a surge in international silver prices, silver futures prices broke through $95 per ounce this week, having risen over 230% since the beginning of 2025. As the only fund in the public fund market primarily investing in silver futures, the net asset value of the SDIC Silver LOF has also climbed steadily. Despite purchase restrictions, the on-exchange premium rate for the SDIC Silver LOF remains elevated, marking the 15th time since January 2026 that it has issued a premium risk warning.
The SDIC Silver LOF will continue its trading halt tomorrow. On the evening of January 22, SDIC Credit Fund announced that the secondary market trading price of the Class A shares of its SDIC Credit Silver Futures Securities Investment Fund (LOF) was significantly higher than the fund's net asset value per share, representing a substantial premium. To protect investors' interests, the fund will resume trading at 10:30 on January 23, 2026. Prior to this, the fund had already been halted for the entire trading day on January 22.
The announcement showed that the Class A shares of the SDIC Silver LOF have a daily purchase limit of 100 yuan. However, despite continuous rises in silver prices, arbitrage activity remains strong. On January 21, the fund's on-exchange price rose 9.19%, closing at 3.92 yuan, representing a premium of over 50% compared to the off-exchange net asset value of 2.598 yuan.
SDIC Credit Fund reiterated in its announcement that investors could face significant losses if they blindly invest in fund shares with high premium rates. It also stated that if the premium rate in the secondary market trading price on January 23 does not effectively decrease, it has the right to apply to the Shenzhen Stock Exchange for intraday temporary trading halts, extending the halt period, and other measures to warn the market of risks.
Quarterly scale growth exceeds 100 billion yuan. As the only fund in the public fund market primarily investing in silver futures, the SDIC Silver LOF offers extremely low volatility relative to silver futures and low transaction thresholds, both for off-exchange subscriptions and on-exchange trading, making it highly popular and attracting substantial capital for allocation.
The on-exchange price of the SDIC Silver LOF has also surged significantly recently, rising over 70% in less than a month since the start of 2026, following a cumulative increase of nearly 160% in 2025. Despite restrictions on large subscriptions, the fund's scale still grew substantially in the fourth quarter.
The recently disclosed 2025 fourth quarter report shows that the fund's net value increased by 62.43% during the reporting period. The number of shares rose from 5.322 billion to 9.36 billion, with Class C shares increasing by over 100% in a single quarter. Consequently, the fund's scale expanded rapidly. The Q4 report indicates that the total scale of the SDIC Silver LOF reached 18.944 billion yuan at the end of the fourth quarter of 2025, an increase of 185.31% compared to the end of the third quarter.
In the Q4 report, the fund manager of the SDIC Silver LOF, Zhao Jian, discussing the current silver market trend, stated that in Q4 2025, the US government experienced its longest "shutdown" crisis, and the unemployment rate rose significantly. Following the interest rate cut in September last year, the Federal Reserve implemented two more rate cuts, totaling 50 basis points. A temporary shortage emerged in the London silver spot market, and silver was included in the US "Critical Minerals" list.
Zhao Jian emphasized that, influenced by these and other factors, the silver price trend has been quite sharp, significantly outperforming gold. Taking London silver spot as an example, after breaking through its historical high in early October, it experienced a brief consolidation in the latter half of October, then rapidly broke through major integer thresholds like $60, $70, and $80, with a very steep slope, achieving a quarterly increase of 53.4%. Domestic performance was slightly stronger than international markets. During the same period, London gold spot rose by approximately 11.9%. The gold-silver ratio quickly converged to around 60, positioning it near the long-term historical average.
The environment for silver price increases remains favorable. With silver futures prices breaking through $95 per ounce, Citi released a research report stating that the bull market for precious metals is expected to continue in the short term due to anticipated heightened geopolitical risks, persistent physical market shortages, and renewed doubts about the Federal Reserve's independence. Citi expressed a bullish outlook for silver, targeting $100 per ounce.
A fund manager in Southern China focusing on the non-ferrous metals sector mentioned that, historically, the current gold-silver ratio is at a relatively low level. However, from a short-cycle perspective, the issue of low silver inventories has not been resolved, and liquidity remains relatively loose, so the overall environment is quite favorable for silver prices.
Some private equity institutions also noted that the silver market is small in scale, and its liquidity is easily influenced by large capital flows, still qualifying as a speculative instrument. They advised silver investors to maintain close attention to the silver market and price trends recently, reasonably control positions based on their own risk tolerance, enhance risk prevention awareness, make decisions cautiously, and invest rationally. They recommended that investors adopt a diversified investment strategy, using a multi-asset portfolio to mitigate the impact of volatility from any single asset class.
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