Major Portfolio Shifts After 143% Gains: Third-Place Equity Fund's Q2 Holdings Revealed

Today, several funds have disclosed their second-quarter reports, including the Red Earth Innovation New Technology Stock Fund. This fund achieved a return exceeding 140% in the first half of the year, securing the third-place position among standard equity funds.

The top ten holdings are primarily concentrated in semiconductors, photonics, storage, and related sectors. Notably, the portfolio saw significant turnover in the second quarter, with six stocks being replaced. Many of these changes involved popular technology stocks in the market, such as Hengtong Optic-Electric, Beijing Ingenic Semiconductor, and VeriSilicon Microelectronics.

It is worth mentioning that as the fund's net asset value has continued to rise, the fund management company has initiated redemptions of its self-purchased shares. For instance, from April to June, the company redeemed portions of its holdings in the Red Earth Innovation Technology Stock Fund on a monthly basis.

Over Half of Top Holdings Replaced

First, examining the Red Earth Innovation New Technology Stock Fund managed by Gai Junlong, this fund has been highly notable in the first half of the year. Its Class A shares delivered a six-month performance of 143.57%, ranking third among all standard equity funds for H1 2026. Its primary investment focus is the AI industry chain.

According to the newly released Q2 report, the overall investment direction remains largely unchanged, but there have been substantial adjustments at the individual stock level. Six holdings were replaced in the second quarter, with changes concentrated in the chip, photonics, and storage sectors.

Specifically, Beijing Ingenic Semiconductor, Comart Technology, Forever Bright, Hengtong Optic-Electric, Changchuan Technology, and VeriSilicon Microelectronics entered the top ten holdings. Exiting the list were Xin Qi Wei Zhuang, Sunwoda Electronic, Supcon Technology, Penghui Energy, Foshan Plastics Group, and Zhongtian Technology.

Furthermore, holdings in New Eoptolink and were increased significantly, while the position in was also raised compared to the end of the first quarter.

Beyond this fund, other products managed by Gai Junlong show similar patterns, with considerable adjustments to their top ten holdings in the second quarter.

For example, the Red Earth Innovation Technology and Innovation Fund replaced half of its top ten holdings. Forever Bright, Beijing Ingenic Semiconductor, Hengtong Optic-Electric, VeriSilicon Microelectronics, and entered the list, while Enjie Co, Aisolar Energy, Penghui Energy, Sunwoda Electronic, and Hunan Yuneng exited.

Fund Company Redeems Portion of Self-Held Shares

It is noteworthy that while these funds continue to pursue hot sectors like chips, photonics, and storage, the fund management company has begun gradually redeeming some of its self-purchased shares.

For instance, regarding the Red Earth Innovation Technology Stock Fund, the fund company redeemed a portion of its fund shares every month from April to June. Its current holding has now decreased to below 5 million shares.

Additionally, these popular sectors have recently experienced noticeably increased volatility. The fund manager also discussed potential future portfolio adjustments in the Q2 report.

In the Q2 report for the Red Earth Innovation Transformation Select Fund, Gai Junlong stated: "As the market for sectors related to the artificial intelligence field continues to rise, attention on the technology sector is increasing. We will closely monitor the sustainability of the AI industry's prosperity and potential inflection points. We will anchor our decisions on the fulfillment of company earnings, comprehensively consider factors such as company valuation and how stock prices reflect future expectations, and strive to conduct thorough risk-return assessments for our investments."

"Currently, for technology-related sectors, high market expectations often lead to the risk of future underperformance, which can cause significant market fluctuations. These are risks we must remain highly vigilant about. At the same time, we will actively track and research industries with potential investment opportunities, such as new energy, finance, robotics, consumer goods, healthcare, and cyclical sectors. We will continuously optimize our investment strategy based on dynamic market conditions," Gai Junlong further elaborated.

In summary, while investors chase technology themes, they must consistently prioritize risk management. Although these funds have delivered outstanding performance over the past year, looking back a few years further reveals periods of significant drawdowns between 2022 and 2023. Therefore, such strong performance should not be viewed as a permanent norm.