On October 28, the third-quarter disclosures from mutual funds officially concluded, and the top ten heavily weighted stocks of public funds were revealed.
Since the third quarter, technology sectors in both A-shares and Hong Kong stocks have seen intensified volatility and obvious corrections, and funds that had doubled returns in the first half of the year suffered sharp drawdowns.
Amid the broad sell-off, fund managers' response strategies diverged significantly, with some choosing to hold firm or even add to large-model and computing-power leaders, enduring drawdowns of nearly 60%, while others keenly detected marginal industry changes and decisively rotated toward edge AI, high-dividend and traditional defensive sectors, keeping drawdowns within 20%.
Behind the divergence lies different institutions' varying understanding of the sustainability of the technology industry's prosperity, valuation tolerance, and momentum for economic recovery.
Through changes in heavily weighted stocks in public funds' third-quarter reports, this article attempts to reconstruct the hidden institutional repositioning battle during this period of violent market swings.
The capital market's cyclical shift has been more dramatic than expected. Looking back at the first half of 2026, driven by the explosive growth of the AI industry and rising computing-power demand, a batch of equity funds heavily invested in the semiconductor supply chain stood out.
Entering the third quarter, persistently rising overseas U.S. Treasury yields weighed on global risk asset valuations, and combined with earlier excessive gains in tech stocks and crowded institutional positioning, the market saw a major correction.
According to Wind data, as of October 27, more than 200 doubled-return funds that had gained over 100% in the first half had all fallen from grace, with the best performer being E Fund Supply Reform, which had a year-to-date return of 97.48%.
These products, once the envy of the entire market, posted an average interval return of -46.26% since the third quarter, with some giving back the excess gains accumulated earlier.
Wind data shows that as of October 27, Founder Fubon Core Advantage A, which gained 183.67% in the first half and won the half-year championship, had retreated 57.30% since the third quarter; Caitong Multi-Strategy Fuxin, which followed with a first-half return of 172.94%, also failed to escape the curse, falling 53.13% since the third quarter.
Moreover, as of October 27, Soochow Multi-Strategy A became one of the doubled-return funds with the largest drawdown since the third quarter at -60.44%, while Orient Alpha Technology Smart Select A and Rongtong Industry Trend A also suffered heavy losses of -58.90% and -58.17%, respectively.
On the other side, some funds demonstrated strong resilience against declines. E Fund Supply Reform Flexible had a drawdown of 17.06% since the third quarter, making it a "resilience pioneer" among similar products; Harvest Technology Innovation also locked its drawdown at 26.08% during the same period in a volatile market.
Details of heavily weighted stocks disclosed in third-quarter reports show that behind the differences in drawdowns were different repositioning paths in the third quarter.
From the top ten heavily weighted stocks disclosed by public funds in the third quarter, it can be seen that in the face of the overall correction in tech stocks, fund managers' responses can be roughly divided into two camps: one is the track loyalists, trying to find more explosive investment opportunities during the correction; the other is the balanced rotation camp, controlling drawdowns by reducing sharpness and increasing defensive assets.
As one of the products with severe drawdowns in the third quarter, Orient Alpha Technology Smart Select A's repositioning trajectory is full of adherence to the semiconductor cycle. The fund's previously disclosed second-quarter report showed that it had heavily weighted GigaDevice, Shannon Chip, Longsys and Ingenic Semiconductor, among other pan-storage and semiconductor niche leaders.
Entering the third quarter, despite enormous selling pressure on tech stocks, the fund still held its positions in industry allocation. The third-quarter report shows that Orient Alpha Technology Smart Select A's top five heavily weighted stocks remained locked in information technology and industrial sectors: it newly added ChangXin Technology as its third-largest holding, raised Puya Semiconductor to its fourth-largest holding, and although it reduced holdings in targets such as GigaDevice, Ingenic Semiconductor and Shannon Chip, these stocks still occupied heavy positions.
However, this high-position adherence within a single track did not receive positive market feedback in the third quarter. According to Wind data, among the Shenwan first-level TMT industries, the electronics and communications sectors fell 32.65% and 28.72%, respectively, in the third quarter.
Soochow Multi-Strategy A and the first-half champion Founder Fubon Core Advantage A, which also faced deep net value drawdowns, still had their repositioning logic in semiconductors and information technology. Founder Fubon Core Advantage A removed storage chip stocks such as Demingli in the third quarter, pushed ChangXin Technology to its largest holding, and retained targets such as Ingenic Semiconductor and Jingzhida. Soochow Multi-Strategy A continued to heavily weight GigaDevice and Puya Semiconductor.
Under a collapsing nest, adherence inevitably bore the damage of systematic sector correction.
Unlike the above products' contrarian adherence, Harvest Technology Innovation and E Fund Supply Reform chose flexible repositioning. As a technology-themed fund, Harvest Technology Innovation's top five heavily weighted stocks at the end of the second quarter were all semiconductor equipment and manufacturing names such as Skyverse, GigaDevice, AMEC, and NAURA. By the end of the third quarter, the fund sharply cut high-valuation pure computing-power and semiconductor equipment holdings, shifting toward AI applications and edge AI with higher earnings certainty and lower valuations, such as Luxshare Precision and Tencent Holdings, which jumped to become the top two holdings in the third quarter, and also introduced China Telecom, which has more obvious dividend characteristics.
A series of repositioning and defensive switches enabled the fund to control its drawdown to 26.08% during the main decline in tech stocks since the third quarter, significantly outperforming its performance benchmark and similar products over the same period.
A more thorough rotation was seen in E Fund Supply Reform Flexible. Against the backdrop of a slight decline in overall equity仓位, the fund stepped outside the technology sector and substantially increased allocation to CXO, coal, non-ferrous metals, and machinery equipment industries in the third quarter.
Diversifying and balancing the allocation portfolio allowed the fund to retreat only 17.06% since the third quarter, performing steadily among the former doubled-return fund camp.
In the face of a nearly 60% drawdown since the third quarter, Rongtong Industry Trend A's fund manager Li Jin still showed firmness in "industrial trends with a sense of the times" in the third-quarter report. Li Jin admitted that the larger third-quarter drawdown was due to allocating more to upstream segments related to price increases, and after realizing that the sustainability of price increases was not strong, he had switched positions to downstream segments.
Li Jin's logic for optimism about the market lies in cheapness and real demand. Li Jin believes that although the development of the AI industry will not be smooth sailing, its long-term growth space is enormous. On one hand, A-share computing-power leaders are valued at about 10 times PE next year, and Hong Kong internet leaders at less than 15 times PE, both relatively cheap from a valuation perspective; on the other hand, data usage in application scenarios such as coding and agents is growing exponentially, and related cloud vendors' quarterly reports show rapidly growing demand.
Li Jin said that as time enters the third-quarter earnings disclosure period, the computing-power sector is expected to welcome an earnings-driven rally. In terms of the profit ceiling that major computing-power leaders can reach in the foreseeable future, their market capitalization still has considerable room to rise. At the same time, after autonomous driving accumulates a certain amount of large-scale video training, it is expected to cross the industry development threshold in the next one to two years; the robotics industry, driven by China's supply chain's low cost and high-efficiency iteration, has significantly accelerated its growth and is also expected to achieve breakthroughs later.
Wu Hao, fund manager of Founder Fubon Core Advantage, said in the third-quarter report that after the third-quarter adjustment, trading crowding and leverage levels have clearly declined, and valuation pressure has been released in stages. He judges that structural opportunities will still outweigh index opportunities, structure matters more than position, and he will select directions with strong earnings certainty and verifiable prosperity; at the same time, he will closely monitor the pace of pro-growth policy implementation and marginal changes in external disturbances such as overseas liquidity.
Looking ahead, Wu Hao believes that the storage price increase trend will continue in the fourth quarter, though the slope will slow; in 2027, storage will account for more than 50% of cloud capital expenditure, the HBM market size is expected to double, and on the supply side, HBM4's crowding out of advanced capacity and the slow pace of new supply release may extend the tight supply-demand pattern to the end of 2027, with the industry driver switching from the inventory cycle to AI structural supply and demand. The risk lies in new capacity release and narrowing room for earnings upgrades in the second half of 2027. Therefore, at the allocation level, he will shift from general storage elasticity to long-term agreement locking and high-visibility HBM and high-end enterprise SSDs, avoiding consumer-side speculation. At the same time, he will pay attention to deterministic opportunities on the equipment side brought by domestic storage manufacturers' increased capital expenditure and capacity expansion.
Compared with the optimists, Harvest Technology Innovation's third-quarter report showed a more cautious attitude. The fund's manager Wang Guizhong pointed out that marginal changes were observed in the third quarter: the ARR growth of overseas leading model companies slowed marginally, and AI's penetration from developers to white-collar workers still takes time.
At the same time, Wang Guizhong expressed concern about valuations: "Some computing-power stocks rose sharply earlier, and the market consensus implied earnings forecasts for the next one to two years are already at a high level, so the tolerance for valuation versus earnings realization has narrowed accordingly." Based on this judgment, Wang Guizhong reduced some AI computing-power holdings while increasing positions in AI applications and edge AI.
In the medium to long term, Wang Guizhong said he remains optimistic about the AI industry's development. The penetration and diffusion of any new technology requires a process of continuous cost reduction and increasing application popularity, and AI is at this stage; society is accelerating the use of AI to improve production efficiency, which is the general trend. But when it comes to stock investment, it is still necessary to comprehensively assess factors such as the pace of AI new-scenario explosions in the next one to two years, earnings forecasts and valuation levels for the computing-power sector, and directions of structural new technology breakthroughs, and dynamically adjust AI-related position allocation and stock selection.
E Fund Supply Reform Flexible's fund manager Yang Zongchang said regarding third-quarter repositioning that at the beginning of the third quarter he continued the repositioning strategy from the end of the second quarter, continued adjusting the portfolio, slightly reduced overall equity position, and greatly optimized holdings. At the same time, in the third-quarter report, he emphasized greater adaptability to the overall macro environment.
Yang Zongchang pointed out that while maintaining attention to large-model technology and commercialization progress, he increased research on high-quality companies in traditional industries, and short-term headwinds may instead bring good prices and buying opportunities.
Sina statement: This message is reprinted from Sina's cooperative media. Sina publishes this article for the purpose of conveying more information and does not mean it agrees with or confirms its views or descriptions. The article content is for reference only and does not constitute investment advice. Investors operate at their own risk based on this.
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