The first three quarters concluded with remarkable performance for the public fund industry, marking a harvest year amid this structural bull market. Active equity funds delivered outstanding results, staging an impressive turnaround.
Data shows that supported by two major growth sectors - AI computing power and innovative pharmaceuticals - 53 funds achieved over 100% returns year-to-date as of September 30th. Technology growth style emerged as the biggest winner, while commodities represented by gold also surged, with gold ETFs generally rising over 40% year-to-date.
**53 "Double-Return" Funds Emerge**
Active equity funds performed exceptionally well in this year's structural market, producing a batch of remarkable "double-return" funds.
Wind data shows that as of September 30th, 53 funds achieved returns exceeding 100% year-to-date, with active equity funds accounting for 42 of them, representing nearly 80% of the total. This fully demonstrates fund managers' precise positioning capabilities in hot sectors like technology growth.
Specifically, YongYing Technology Smart Selection A, managed by Ren Jie, topped the active equity fund performance rankings for the first three quarters with a 194.49% return. The second quarter report shows the fund heavily invested in overseas computing power industry chains, with top five holdings including Innolight, AAOI, T&S Communications, Shengyi Technology, and Source Photonics - all leaders in optical modules and PCB sectors. PCB bull stock Shengyi Technology surged 581% year-to-date, contributing substantial returns to the fund.
Following closely is HuiTianFu Hong Kong Advantage Select A, managed by Zhang Wei, with a year-to-date return of 155.09%, leading among QDII funds. The second quarter report shows this fund heavily weighted Hong Kong innovative pharmaceutical stocks, with top five holdings including Immuneonco Biopharmaceuticals, Cstone Pharmaceuticals, Innovent Biologics, Hutchmed, and Chia Tai Tianqing.
Additionally, CPIC Digital Economy A managed by Feng Ludan ranked third with a 140.86% return, while Hengvest Advantage Select managed by Wu Haining and AVIC Opportunity Navigator managed by Han Hao ranked fourth and fifth with returns of 128.21% and 127.17% respectively. All three funds heavily invested in AI industry chains focused on overseas computing power.
Notably, only funds with returns exceeding 115% this year could enter the top 10 market-wide fund performance rankings, indicating exceptionally fierce competition.
**Gold ETFs Dominate Commodity Funds**
While active equity funds' success can be attributed to stock market performance, gold undoubtedly became this year's most brilliant "star" in the commodity sector.
Reflected in fund performance, gold ETFs became the biggest winners among commodity funds this year. Wind data shows that as of September 30th, all 14 gold ETFs recorded year-to-date gains exceeding 40%, with Gold ETF Fund (518660.SH) managed by Zhao Xu and Gold ETF ChinaAMC (518850.SH) managed by Rong Ying achieving returns of 41.48% and 41.47% respectively.
Extending the timeframe to the past three years, these gold ETFs' cumulative returns exceeded 110%, demonstrating strong long-term allocation value.
Recently, international gold prices repeatedly hit new highs, with COMEX gold touching a peak of $3,922.7 per ounce, just one step away from breaking the important $4,000 per ounce threshold. Hua An Fund believes that after the Federal Reserve restarted rate cuts in September, the subsequent major rate-cutting cycle may benefit gold's investment value. Combined with tariff uncertainties, US debt credit crisis concerns, and Federal Reserve independence worries, the dollar remains in a downward trend while central bank gold purchases continue, suggesting gold remains on a new cycle path.
Besides gold, non-ferrous metals ETFs also gained 7% year-to-date. In the balance between inflation and growth, commodities will remain an indispensable component of fourth-quarter asset allocation.
**Fourth Quarter Asset Allocation Strategy**
Looking ahead to the fourth quarter, after popular sectors have accumulated substantial gains, how should investors proceed? Several fund companies have recently provided asset allocation recommendations.
YongYing Fund believes that looking forward, market sentiment remains elevated with continuous structural opportunities, but the market has also priced in some long-term expectations during previous rallies, showing signs of overextension. Structurally, this market round is driven by liquidity, so the rhythm starts with growth, may later shift to pro-cyclical and consumption sectors, and finally to stable dividend stocks. Currently, beyond growth sectors, attention should be paid to some lagging pro-cyclical sectors that may be catalyzed by anti-involution policy reinforcement, followed by dividend value sectors after catch-up rallies.
Zhang Wenjun, head of FOF Investment Department at Caitong Asset Management, stated that technology, innovative pharmaceuticals, robotics, and energy security-related assets have all risen significantly this year. From a valuation perspective, these sectors currently don't have low valuations, but viewing them from the angle of the fourth global industrial revolution brought by AI technological innovation, they deserve certain premium space. There may be some volatility in the short term, but the fourth quarter outlook for related industry chains remains positive.
Additionally, Zhang Wenjun believes that among macro fundamentals-related assets in recent years, sectors with relatively superior supply logic have performed better, such as non-ferrous metals. Under "anti-involution" policy advancement, sectors that have suffered from oversupply and sustained revenue pressure in recent years may welcome valuation repair opportunities, warranting attention to new energy and chemical-related sectors.
Cathay Fund believes the bull market tone remains unchanged, continuing to favor subsequent market performance. Style won't switch, with emerging technology still the main theme, while increasing allocation to cyclical financials. Hong Kong technology and pharmaceutical stocks are expected to continue recovery. First, AI remains the direction with the strongest fundamental momentum currently, with Oracle orders surging, overseas token demand growing rapidly, and CPX bringing new demand cycles for PCB and 1.6T optical modules. Second, Hong Kong internet stocks look promising, as Hang Seng Tech has significantly underperformed A-share TMT since June and may catch up after the Fed's confirmed rate cuts. Third, "anti-involution" policies further improve competitive landscapes in new energy industries, with solar, lithium battery, and wind power sectors worth attention.
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