Last week, the A-share market experienced a pattern of rising to highs before retreating, a trend mirrored in the performance of public fund FOFs. Overall, equity-oriented FOFs continue to demonstrate a relatively high investment success rate, maintaining their appeal as a favored investment tool. Notably, since the beginning of the year, public fund managers have been actively purchasing shares in their own FOF products. Concurrently, the industry is undergoing a consolidation, with several FOFs terminating their contracts and entering liquidation procedures last week.
During the week of May 18th to May 24th, the A-share market saw initial gains followed by a pullback. Sectors and industries within the technology segment that had seen significant earlier advances showed clear signs of trading congestion, subsequently leading to pronounced profit-taking. Despite this, the weekly performance of public equity-oriented FOFs remained generally stable, with a success rate that was not particularly low.
Wind data indicates that, taking stock-oriented FOFs as an example, the investment success rate reached 50%. However, the performance of top-tier products was limited. Fullgoal Zhixin Industry Selection A posted the best weekly performance among stock-oriented FOFs with a return of 1.31%. Only two stock-oriented FOFs in the entire market achieved weekly returns exceeding 1%.
Hybrid FOFs continued to lead across various types of public fund FOFs, delivering strong performance. China Southern Haoyi Jinqu Jushen 3-Month Holding A recorded the best performance in its category last week with a return of 3.5%. Examining the top holdings from its first-quarter report, funds such as Cathay Semiconductor Equipment ETF, China Southern Information Innovation C, and China Southern A500 ETF performed exceptionally well over the past week, with the highest weekly return surpassing 7%.
Among target-date retirement FOFs, Penghua Retirement Target Date 2050 Five-Year Holding performed the best, recording a weekly return of 2.5%. According to this fund's first-quarter report, holdings like E Fund Environmental Theme C, E Fund Environmental Theme A, and Bosera Yulong C performed strongly over the past week. Notably, the weekly returns for both E Fund Environmental Theme A and C were close to 13%.
Last week, sectors like semiconductors and AI computing power, which had led earlier gains, saw substantial short-term accumulated increases, leading to significant unrealized profits in the tech sector. The transaction volume proportion of the TMT sector remained consistently above 40%, indicating overly crowded trading. As the month-end approached, capital moved to realize profits.
As the US-Iran conflict prolongs, its marginal impact on the A-share market has diminished. The A-share market is currently focused on directions related to improvements in domestic corporate profitability and high-growth sectors. MSFT Fund Management noted that macro liquidity remains relatively ample, creating favorable conditions for capital market entry. The firm maintains a medium-to-long-term optimistic view on the equity market, with a focus on technology growth and resource sectors for 2026.
In fact, fund managers themselves demonstrate strong confidence in the performance of hybrid FOFs, as evidenced by their self-investment actions. It can be said that this fund type is the most favored category for institutional self-investment in their own FOFs.
According to statistics from Howbuy, as of May 24th, among public fund institutions' self-investments in their own FOFs, hybrid FOFs, with a net subscription amount of 320 million yuan accounting for 9.27%, represent the most popular direction for institutional capital self-investment.
Against the backdrop of ongoing market volatility, managers are expressing confidence in the multi-asset, multi-strategy allocation capabilities of hybrid FOFs through tangible self-investment. Simultaneously, bond-oriented FOFs also received a small net subscription of 16 million yuan, accounting for 0.46%, indicating institutional demand for stable allocation in lower-risk FOF categories.
This divergence suggests that managers are actively adjusting their self-investment strategies, tilting capital towards hybrid FOFs with better liquidity and more flexible strategies, rather than simply exiting the FOF space. Industry insiders point out that hybrid FOFs, due to their cross-market, cross-category allocation advantages, are becoming the "darling" of public fund institutional self-investment. They may continue to attract increased investment from managers in the future, injecting confidence into product scale stability and performance enhancement.
At the same time, some products within the existing FOF landscape have entered the phase-out process. Last week, both Caitong Asset Management and Zhong Ou Fund had FOF products contract terminations, specifically Caitong ZBG Bohong Active 6-Month and Zhong Ou Yixiang Balanced Retirement Target Three-Year Holding. The final operation date for both funds was May 23rd, and they entered liquidation procedures on May 25th.
The FOF industry is accelerating its metabolism, presenting a healthy ecosystem of "advancement and retreat." On one hand, managers are actively deploying new products like hybrid FOFs, demonstrating allocation confidence with real capital. On the other hand, some target-date retirement FOFs and earlier-established products, due to persistently low scale and underperformance relative to expectations, have triggered contract termination clauses and are progressively entering liquidation.
This survival-of-the-fittest mechanism drives industry resources to concentrate towards products with strong investment research capabilities and clear strategies, avoiding the operation of "ailing" products. The industry believes that phasing out inefficient products not only frees up managerial focus but also helps investors filter out high-quality FOFs with genuine asset allocation value. In the long run, this is conducive to the high-quality development of the FOF market.