The mutual fund industry in 2025 was anticipated to be a year of recovery. However, against the backdrop of a rebounding A-share market, Yinhua Fund has notably underperformed the sector.
As the overall A-share market warmed up, with the Shanghai Composite Index reclaiming ground near 4000 points, multiple investment themes such as AI, high dividends, advanced manufacturing, and the revaluation of central state-owned enterprises took turns leading the market. Many fund companies capitalized on this market environment to achieve growth in both assets under management and profitability. Top-tier public fund managers, in particular, generally experienced a long-awaited period of recovery.
Surprisingly, Yinhua Fund appeared conspicuously quiet during this market upswing.
Data shows that in 2025, Yinhua Fund achieved operating revenue of 30.44 billion yuan, a mere year-on-year increase of 6.55%. Its net profit was 6.04 billion yuan, growing by 8.24% year-on-year. This growth rate places the company nearly at the bottom among the top fifteen fund companies by size, standing in stark contrast to the widespread double-digit growth seen across the industry.
More critically, Yinhua Fund's issues extend beyond just "slow growth."
What truly drags the company down is its once core, most profitable, and brand-defining business: active equity management.
As of the first quarter of 2026, the scale of Yinhua Fund's equity-focused funds has continued to shrink from its peak, with the size of its mixed-asset funds nearly halved. A significant number of its core products have experienced prolonged drawdowns, with some funds not only underperforming their peers but also consistently lagging behind their performance benchmarks over the long term. Yinhua Prosperity Theme, once considered a "flagship product" by the market, has seen its cumulative return over the past five years plummet by -41.2%. With core products persistently bleeding value, redemption pressure from fund investors continues to intensify.
Active equity management has always been the core profit driver for public fund companies.
Compared to money market funds and bond funds, equity products command higher management fees and are more effective in building star fund managers and brand influence. The current slowdown in Yinhua Fund's active equity business essentially signals that its most important profit engine is stalling.
This directly exposes the most critical issue for Yinhua Fund in recent years: an over-reliance on the "star-making model."
From the "Yinhua Twin Stars" to Fading Stars: The Active Equity Myth Begins to Crumble
Looking back at Yinhua Fund's development over the past decade, it becomes evident that the company was exceptionally skilled at creating star fund managers.
In earlier years, whether it was Lu Wenjun or Wang Hua, both attracted significant industry attention with their outstanding performance. Especially during the rapid expansion phase of the public fund industry, the combination of a "star fund manager + blockbuster product" became almost the most effective model for top institutions to grow their assets.
Later, Li Xiaoxing and Jiao Wei took up this mantle.
Li Xiaoxing rose rapidly with a growth-oriented investment style, once managing assets exceeding 50 billion yuan. Jiao Wei capitalized on the consumer sector rally, and together with Li Xiaoxing, they were dubbed the "Yinhua Twin Stars." During those years, Yinhua Fund held a dominant position in the active equity space, and the star effect brought substantial capital inflows to the company.
However, the biggest risk of the star model lies in its high dependence on market trends.
After 2022, the market underwent a dramatic style shift. The consumer and growth sectors entered a prolonged adjustment phase, and the once "core investment themes" no longer held an absolute advantage. Some of Yinhua Fund's star managers persistently adhered to their original investment frameworks, failing to adapt promptly to market changes, which ultimately led to continuous net asset value drawdowns in their products.
For example, Yinhua Heart Enjoy One-Year Holding Period Mixed Fund, managed by Li Xiaoxing, has yet to recover its losses since inception, posting a loss of 17.42%. A large number of investors who bought in at high levels remain locked in for the long term, and the fund's size has rapidly shrunk from over 10 billion yuan to 3.29 billion yuan.
Jiao Wei's situation is similarly challenging. Amid the sustained downturn in the consumer sector, several funds under his management have declined by over 40%, and his total assets under management have shrunk from a peak of over 30 billion yuan to less than 10 billion yuan.
More seriously, following the performance collapse of its star managers, Yinhua Fund has not established a sufficiently robust, platform-based investment research system to take over.
In the past, the market was willing to believe in "stars." Now, a growing number of investors are realizing that fund companies relying solely on individual styles struggle to genuinely navigate market cycles. Once star fund managers falter, the entire company's brand value can be rapidly eroded.
The very "star-making capability" that once brought the greatest success has now become a source of risk for the company.
Can ETFs Rescue Yinhua Fund?
Faced with persistent pressure on its active equity business, Yinhua Fund has evidently begun seeking new growth avenues, with Exchange-Traded Funds (ETFs) being placed in an increasingly central position.
General Manager Wang Lixin has publicly emphasized on multiple occasions that the company will focus on developing its ETF business going forward, aiming to gradually build a product matrix encompassing "broad-based + thematic + strategy" ETFs.
From a data perspective, Yinhua Fund's ETF business has indeed shown significant growth over the past two years. The net asset value of its ETF products has rapidly climbed from around 100 billion yuan at the end of 2024 to over 160 billion yuan by April 2026, an increase exceeding 50%. Concurrently, the company's product pipeline has clearly tilted towards ETFs. Currently, the majority of products in its development pipeline are concentrated in the ETF and Fund of Funds (FOF) sectors, while the proportion of traditional active equity products is diminishing.
Yinhua Fund is gradually shifting its growth focus from being "driven by active equity" towards "index-based expansion."
However, the entire ETF industry has long entered a phase of intense competition. By the first quarter of 2026, the total ETF market size had approached 5 trillion yuan. Leading companies, leveraging their distribution channels, brand strength, product liquidity, and first-mover advantages, have already established very deep moats.
The industry has entered a typical "winner-takes-most" phase. Giants like China Asset Management and E Fund have firmly secured core positions through their scale, distribution networks, and brand advantages.
While Yinhua Fund is catching up, it holds no particular advantage in terms of market share or industry ranking.
Consequently, in recent years, the company has proactively reduced management and custody fees for its ETFs, QDII products, and others on multiple occasions, while continuously increasing the availability of low-fee share classes, hoping to attract capital inflows through lower costs. Some products have even compressed holding costs to extremely low levels.
The problem, however, is that ETFs are inherently a low-fee business. Without sufficient scale to support it, relying solely on fee reductions can easily lead to a situation where "scale fails to increase while profits are squeezed first."
Achieving scale growth through ETFs might temporarily relieve Yinhua Fund from its "scale anxiety," but it cannot fundamentally resolve the crisis of investor trust it faces.
For investors, fees are never the core variable in decision-making. What they value more is: Does this fund company possess the investment research capability and stable mechanisms to consistently generate long-term excess returns?
Today's Yinhua Fund faces a dual challenge: declining trust in its active equity management and fierce competition in the ETF red ocean. The equity halo once upheld by its star fund managers is gradually fading.
As "star-making marketing" becomes increasingly difficult to sustain and investors pay more attention to long-term returns, what fund companies ultimately compete on is their investment research systems, risk control capabilities, and the core competencies that truly allow them to navigate market cycles.
Comments