The A side and B side of a public fund manager with 160 billion yuan. A fund company managing more than 160 billion yuan has recently drawn controversy not because of its flagship equity product, but because of a debt-biased fund that has lost nearly 18% year to date.

Dongfang Minfeng Return Ying'an (Class A: 004005; Class C: 004006) is supposed to use bonds as its foundation, with the bond index carrying an 85% weight in its performance benchmark. Yet as of September 18, 2026, its Class A shares had lost 17.7% year to date, with a maximum drawdown of 28.9%. By the end of the second quarter of 2026, its equity position had climbed to 38.9%, close to the 40% contractual cap.

The greater contrast is that this fund ranked among the top of its peers in 2025 with a return of about 17.6%, but by its 2026 interim report, the share of profitable investors was only 30.74%. From leading last year to trailing this year, from a debt-biased positioning to volatility close to that of an equity fund, this is not merely a failed investment judgment, but also exposes problems at Dongfang Fund in product management, risk control and business structure.

Why a debt-biased fund fell to the bottom of its peer group

The positioning of Dongfang Minfeng Return Ying'an is not complicated. It uses bonds as a base and seeks to enhance returns with some equities, aiming for stable returns while controlling risk. But in actual operation, this debt-biased fund gradually turned into a highly volatile sector product.

At the end of the first quarter of 2026, its equity position was about 28%. By the end of the second quarter, the equity position had risen to 38.9%, close to the 40% contractual cap, and its top ten holdings had all been replaced, mainly in semiconductors, optical modules, PCB and computing hardware. The bond portion was also not sufficiently stable. By the end of the second quarter, convertible bonds accounted for 46.41% of the fund's net asset value, more than 80% of the market value of its bond investments, and were mostly allocated to technology growth directions. Combined with an equity position of nearly 40%, net asset value volatility was inevitably amplified.

Once the sector call went wrong, losses quickly showed up in the net value. In July 2026, a correction in related technology sectors caused the fund to fall more than 21% in a single month.

At the same time, a series of changes occurred in the product's operation. In early August, the net value showed almost no movement for several consecutive trading days, suggesting that equity exposure may have been sharply reduced at the end of July. The product then suspended subscriptions above 1 million yuan, added veteran manager Yang Guibin as co-manager, and cut the management fee from 0.8% to 0.6%. Against the backdrop of a sharp decline in scale and a deep net value drawdown, the clustering of position reduction, subscription limits, the addition of a fund manager and fee cuts inevitably raised questions about the purpose of its continued existence.

Dongfang Minfeng Return Ying'an was originally a mini fund with less than 1 million yuan in scale. After Zhang Bo took over at the end of June 2022, the fund's scale surged to 250 million yuan, carrying a hint of an institution-customized product. In mid-2025, large capital withdrew, and Zhang Bo stepped down at the end of the year, after which the fund returned to mini status. By the end of the second quarter of 2026, its scale was only 10 million yuan.

It was precisely after the fund manager change at the end of last year that the fund's style suddenly shifted, with aggressiveness rising markedly and ultimately forming the current situation.

One AI fund supports 60% of equity scale

The problems of Dongfang Minfeng Return Ying'an can be attributed to an investment mistake in a single product. At the company level, what deserves more attention at Dongfang Fund is that its equity business relies excessively on a small number of products and fund managers.

Dongfang Fund currently manages 167.2 billion yuan, of which bond funds account for 97.95 billion yuan and form the company's main foundation, while equity funds and mixed funds together total 55.23 billion yuan.

However, a single fund, Dongfang AI Theme (Class A: 005844; Class C: 017811), has combined scale of 35.12 billion yuan, accounting for about 64% of the company's equity scale. The concentration problem does not end there. The three funds managed by Yan Kai, namely Dongfang AI Theme, Dongfang Huixin and Dongfang Innovation Technology, have combined scale of 40.68 billion yuan, about 74% of the company's equity scale and about 24% of its total public fund scale. In other words, nearly three quarters of Dongfang Fund's equity scale is concentrated in the hands of one fund manager.

In fact, Yan Kai managed only 5.92 billion yuan at the end of 2025. Just half a year later, that figure had grown to 40.68 billion yuan, mainly driven by rapid short-term performance gains. As of September 18, 2026, the three funds managed by Yan Kai had year-to-date returns of 114.2%, 93.7% and 45.2%, respectively, but their maximum drawdowns over the same period also reached 34.8%, 38.9% and 38.4%. The returns came from concentrated allocation to the technology sector, and the large volatility also stemmed from that concentration.

Making one fund bigger is not a bad thing in itself. The problem is that when a single product contributes more than 60% of equity scale, the company's performance, revenue and market reputation become deeply tied to one sector. When the market rises, scale expands rapidly; when the market weakens, net value drawdowns and redemption pressure may also appear together.

Dongfang New Energy Vehicle Theme (400015.OF) is a reference point. With annual returns of about 116% and 52% in 2020 and 2021, respectively, it grew from a small fund with less than 100 million yuan to 22.44 billion yuan by the end of 2021. But after the new energy rally faded, the fund continued to lose money, and both scale and shares declined in tandem. By the end of the second quarter of 2026, the fund's scale had fallen to 6.33 billion yuan, down more than 70% from its peak.

From new energy vehicles to artificial intelligence, the hot sector has changed, but Dongfang Fund's path of using a single sector fund to expand equity scale has not changed much.

Beyond the hit products, small-scale products cluster together

If a few leading products are excluded, Dongfang Fund's equity business is not particularly strong. Data show that as of September 18, 2026, among the company's 36 equity funds, 16 had year-to-date losses, and 10 had fallen more than 15%. Among them, Dongfang Urban Consumption Theme A lost 33%, Dongfang High-end Manufacturing A lost 28%, and Dongfang Auto Industry Trend A and Dongfang Internet Jia also fell more than 18%. The losing products were spread across consumption, manufacturing, automobiles and the internet, so the weakness cannot simply be attributed to one industry.

It is also worth noting that Li Rui, general manager of the company's equity investment department, currently manages four products with combined scale of 6.63 billion yuan. All have posted losses so far this year, and three of them have lost more than 21%.

In addition, fund scale divergence is also obvious. Among the 36 equity funds, 22 have scale below 200 million yuan, including 9 with less than 50 million yuan. The long-term clustering of small funds not only occupies investment research, operations and distribution resources, but also makes it easy to fall into a cycle of shrinking scale, strategy shifts, greater net value volatility and continued investor redemptions.

On one side is Dongfang AI Theme with scale of more than 35.1 billion yuan; on the other are many products with less than 200 million yuan or even less than 50 million yuan. Such a contrast shows that Dongfang Fund has not yet formed a stable echelon of equity products. Leading products rapidly become large by relying on sector rallies, while tail products lack long-term support from performance and scale.

After scale grows, risk control must keep up

Dongfang Fund, founded in 2004, now manages 167.18 billion yuan. By the end of the second quarter of 2026, its scale had increased by 40.36 billion yuan from the end of 2025, of which funds managed by Yan Kai increased by about 34.76 billion yuan in half a year, supporting most of this round of growth.

Scale growth should have brought more investment research resources and a more complete talent pipeline. But the style change of Dongfang Minfeng Return Ying'an, the high concentration of equity scale and the clustering of mini funds all suggest that Dongfang Fund's management capacity may not have kept pace with its expansion.

On June 16, 2026, Dongfang Fund received a warning letter from the Beijing Securities Regulatory Bureau over issues related to investment operations, and the company said it had completed rectification in areas such as business improvement and system optimization. Two months later, the company completed adjustments to senior executives including the chairman. These changes cannot be directly linked to fund performance, but for a public fund manager that puts investor service first, whether internal controls can be implemented, whether the investment committee can constrain product deviation, and whether the sales side can fully warn of risks are more worthy of attention than short-term rankings.

Dongfang Fund does not lack scale, nor does it lack products with outstanding performance at certain stages. What it truly needs to improve is a more balanced fund manager echelon, a more stable investment framework, and a clearer disposal mechanism for tail products. Relying on one fund manager, one hit product and one hot sector can rapidly expand scale, but it cannot prove that the company has formed replicable investment research capabilities.

And the most important question about Dongfang Minfeng Return Ying'an is not only why the fund manager misjudged the market, but also why a debt-biased product assumed such high equity risk, and why there was insufficient constraint and warning when the strategy clearly changed. The 167.2 billion yuan reflects Dongfang Fund's speed of expansion, while product divergence, risk control and holder experience will determine whether this scale can truly stay.

Disclaimer: Funds involve risks, and investment requires caution. This report is independent third-party research based on publicly available market information, including but not limited to temporary announcements, periodic reports and official interactive platforms. While every effort is made to ensure that the content and views are objective and fair, their accuracy, completeness and timeliness are not guaranteed. The information or opinions in this report are for reference only and do not constitute any investment advice. No responsibility is assumed for any actions taken based on this report.

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