The public offering FOF market is currently experiencing a significant surge in new product launches. Invesco Great Wall Fund recently announced that its Invesco Great Wall Hexi Anyu Mixed FOF with a three-month holding period reached its fundraising cap on the very first day of its public offering, leading to an early conclusion of the subscription period. Since the beginning of the year, several FOFs, including Wanjia Qitai Wanjian, Bosera Yingtai Zhenxuan 6-month, and Puying An Sheng Yingtai Duoyuan Peizhi, have also been fully subscribed on their launch day. Notably, the Bosera Yingtai Zhenxuan FOF attracted approximately 5.844 billion yuan in a single day. According to Wind data, as of March 9th, more than 30 new FOF products have been established this year, with a combined fundraising total exceeding 45.9 billion yuan.

FOF products with a three-month holding period have become particularly favored. The intensity of the FOF issuance market in 2026 has surpassed industry expectations. Unlike the three or five-year lock-up periods common with early pension target funds, the popular FOFs in this wave are generally set with a three-month holding period. This design precisely caters to the capital outflow from maturing bank wealth management products.

"This is essentially a concentrated release of demand for 'deposit substitution'," commented a representative from the retail finance department of a joint-stock bank. "It is anticipated that over 50 trillion yuan in time deposits will mature in 2026, leaving clients facing reinvestment challenges. The three-month holding period FOF, utilizing a 'fixed income plus' strategy—anchored in bonds and supplemented by dividend-low volatility assets, overseas equities, and gold—can provide excess returns relative to deposits while maintaining reasonable liquidity. This has made it the preferred alternative tool recommended by financial advisors."

The popularity of these FOFs also indicates that institutions are strengthening their control over product returns and risks. "Ending the fundraising period early isn't solely about creating scarcity; it's about seizing the optimal window for asset allocation," analyzed a public FOF investment director. "Currently, the risk-reward profiles of stocks and bonds are in a relatively balanced state. Establishing positions early is advantageous for capturing returns through rebalancing strategies. Furthermore, controlling the initial offering size is also aimed at ensuring management quality throughout the product's lifecycle."

Subtle adjustments in product design also reflect a shift in asset allocation logic. The Invesco Great Wall Hexi Anyu FOF invests no less than 80% of its assets in public funds, with equity asset allocation strictly controlled between 5% and 30%. Similarly, the Wanjia Qitai Wanjian FOF, which also sold out on its first day, is a customized product for China Construction Bank's "Long Ying Plan," designed to enhance returns through a multi-asset strategy.

This surge in FOF issuance is rooted in structural adjustments to household balance sheets. Analysts from China International Capital Corporation (CICC) pointed out in a research report that the average decline in retail deposit rates in 2025 was approximately 30 basis points, with the growth of household time deposits slowing significantly. Conversely, the scale of demand deposits, wealth management products, non-monetary market funds, and non-bank deposits accelerated. With weakening savings propensity and the activation of excess savings in 2026, an estimated 2 to 4 trillion yuan in new funds is expected to flow into non-time-deposit investment areas.

This trend aligns with the advancement of pension finance policies. "The popularity of FOFs is an inevitable phase in the development of the third pillar of the pension system," stated the head of pension business at a fund company in Southern China. "In the United States, Target Date Funds (TDFs) account for over 90% of pension investments, with assets under management exceeding $3 trillion. Although China's FOF market started later, its performance in 2025 has bolstered investor confidence. The current hot sales of regular FOFs with three-month holding periods are effectively cultivating investor familiarity with FOFs, laying the market and cognitive groundwork for the future adoption of pension target funds."

Data from bank channels supports this interconnected effect. A financial advisor from a major state-owned bank revealed, "When promoting FOFs to clients now, we also explain the tax benefits of personal pension accounts. Many clients initially experience multi-asset allocation through regular FOFs before making long-term pension investments via Y-shares."

Despite the heated primary market, industry professionals maintain a clear perspective on the sustainable development of FOFs, emphasizing the critical need to avoid the trap of prioritizing initial sales over ongoing management and investor engagement.

"The current FOF boom is fundamentally different from that of 2021," analyzed the aforementioned pension business head. "The 2021 wave was largely driven by market sentiment during a peak in equity markets. In contrast, the 2026 trend is driven by allocation demand underpinned by the dual certainties of 'declining deposit rates' and 'pension necessities'. FOFs, through 'double diversification'—across both assets and strategies—effectively smooth out volatility, and their utility as investment tools is now genuinely recognized."

Concurrently, leading institutions are accelerating the refinement of their product systems. For instance, firms like Invesco Great Wall and Bosera are using three-month holding period products to absorb funds from wealth management products. On the other hand, catering to long-term pension needs, products like the Invesco Great Wall Pension Target Date 2055 FOF with a five-year holding period have demonstrated stable operation and strong performance since inception, forming a complementary product matrix of "short-term tools and long-term pension solutions." Additionally, fee reforms are progressing, with institutions like Invesco Great Wall offering a 90% discount on subscription fees for pension clients.

However, challenges persist. Some small and mid-sized fund companies, while actively applying to launch FOFs, lack the necessary multi-asset investment research capabilities and channel support, leading to rapid asset shrinkage after the product's launch.

"Future competition will no longer be a simple race for scale, but a contest of investment research capability, investor support services, and ecosystem building," emphasized the pension business head. "As an estimated 2 to 4 trillion yuan in deposit funds migrates to non-deposit areas in 2026, FOFs are poised to become a crucial bridge connecting household wealth to the capital markets. However, this potential can only be realized if asset managers commit to high-quality development—avoiding the blind pursuit of initial offering size, refraining from exaggerating return expectations, and not neglecting investor suitability assessments. Only then can FOFs truly become core infrastructure within the asset allocation system."

Industry insiders suggest that the FOF issuance boom in 2026 may just be the beginning, indicating that public offering FOFs are entering a golden period of development.