As the 2026 first-quarter reports of public funds have been fully disclosed, the investment strategies of several prominent fund managers toward the liquor industry have come to light.
Two well-known fund managers with a fondness for liquor stocks—Zhang Kun of E Fund Management and Liu Yanchun of Invesco Great Wall Fund—continued to sell off liquor shares heavily in the first quarter, following significant sales in the fourth quarter of last year. In contrast, another E Fund manager, Xiao Nan, showed a clear preference for Wuliangye Yibin Co.,Ltd., increasing his holdings by 3.1988 million shares, a quarter-on-quarter rise of 43.06%, while substantially reducing positions in Kweichow Moutai Co.,Ltd., Luzhou Laojiao, and Gujing Gongjiu.
Reducing holdings but still finding it hard to let go—this may reflect the underlying sentiment of many top fund managers regarding their operations in the liquor sector.
Six years ago, the rally in large-cap stocks, led by liquor shares, brought fame to fund managers like Zhang Kun. However, his steadfast commitment to liquor stocks has faced increasing market skepticism over the past two years. The recently released fund first-quarter reports indicate that although Zhang reduced his stakes in several liquor companies, they remain core holdings in the funds he manages.
For instance, in the E Fund Blue Chip Selected Mixed Fund, Zhang Kun cut his holdings of Kweichow Moutai Co.,Ltd. by 398,000 shares and Wuliangye Yibin Co.,Ltd. by 2.52 million shares in the first quarter, while making a minor reduction in Luzhou Laojiao and adding to his position in Shanxi Fenjiu. Although Zhang also trimmed liquor holdings in the fourth quarter of last year, the scale of selling was relatively moderate compared to reductions in other stocks.
By the end of the first quarter, the top three holdings of the E Fund Blue Chip Selected Mixed Fund were Kweichow Moutai Co.,Ltd., Wuliangye Yibin Co.,Ltd., and Luzhou Laojiao. The combined market value of these three liquor companies accounted for 29.68% of the fund’s net asset value, with individual stock holdings approaching the 10% regulatory limit for a single listed company.
It is worth noting that the E Fund Blue Chip Selected Mixed Fund experienced net redemptions of over 1.4 billion units in the first quarter. Against this backdrop, Zhang Kun’s reductions were largely passive.
Similarly, Liu Yanchun of Invesco Great Wall Fund, despite a significant shrinkage in assets under management, maintained liquor stocks as core holdings. For example, the Invesco Great Wall Emerging Growth Mixed Fund saw net redemptions of nearly 900 million units in the first quarter, leading Liu to trim positions across major holdings. Although he reduced his stake in Kweichow Moutai Co.,Ltd. by 217,800 shares, it remained the fund’s top holding, accounting for 9.93% of its net asset value. Combined holdings of Shanxi Fenjiu, Wuliangye Yibin Co.,Ltd., and Luzhou Laojiao represented nearly 18% of the fund’s net asset value, indicating a substantial allocation.
Liu Yanchun commented that starting this year, improvements in China’s domestic demand sector are likely to exceed market expectations, presenting significant potential for earnings and valuation upgrades in related sectors. As prices rise and nominal GDP growth accelerates, he expects market trends to gradually shift from liquidity-driven movements back to fundamentals reflecting intrinsic corporate value.
In contrast to the passive adjustments and reductions made by the aforementioned managers, E Fund’s Xiao Nan adopted a more decisive approach. In the first quarter, he increased his position in Wuliangye Yibin Co.,Ltd. by 3.1988 million shares, a 43.06% quarter-on-quarter rise. Interestingly, after Wuliangye Yibin Co.,Ltd.’s disappointing third-quarter earnings report last year, Xiao had reduced his holdings by 4.19 million shares in the fourth quarter. This sharp adjustment raises questions about the investment rationale behind the move.
A review of the E Fund Consumer Industry Fund’s first-quarter report reveals Xiao Nan’s updated assessment of the liquor sector. He noted that terminal sales data for baijiu have stabilized. Based on grassroots research, sales of premium baijiu during the Spring Festival period showed growth. Although long-term consumption scenarios for baijiu have significantly diminished, industry concentration has increasingly shifted toward a few leading brands after recent adjustments. Accordingly, he fine-tuned his liquor holdings based on the pace of brand consolidation and increased allocations to essential goods within the food and beverage sector.
As Xiao Nan indicated, while boosting his stake in Wuliangye Yibin Co.,Ltd., he substantially reduced positions in Luzhou Laojiao and Gujing Gongjiu. After these adjustments, the combined market value of Luzhou Laojiao and Gujing Gongjiu accounted for less than 10% of the fund’s net asset value, while holdings in Kweichow Moutai Co.,Ltd. and Wuliangye Yibin Co.,Ltd. made up 18.84%.
Are there fund managers who have actively and significantly reduced liquor holdings? The answer is yes. In the fourth quarter of last year, He Shuai’s JYSSD Advantage Industry Mixed Fund sharply cut tech stocks to buy liquor shares, with combined holdings in Kweichow Moutai Co.,Ltd., Luzhou Laojiao, Wuliangye Yibin Co.,Ltd., and Shanxi Fenjiu exceeding 25% of the fund’s net asset value. However, in the first quarter, He Shuai corrected course, repurchasing tech stocks and selling liquor holdings. By the end of the quarter, only Kweichow Moutai Co.,Ltd. remained among the fund’s top ten holdings, while Luzhou Laojiao, Wuliangye Yibin Co.,Ltd., and Shanxi Fenjiu were removed from the list, reflecting a clear shift in strategy.
Comments