In the recently disclosed 2025 annual reports of public funds, FOF funds, often referred to as "fund buyers," quietly set a new record: total profits for 2025 exceeded 18 billion yuan, marking the highest level since their inception in 2017.
According to statistics, over the past nine years, public FOF funds have recorded paper gains in six of those years, with profits exceeding 10 billion yuan on two occasions—the previous instance being in 2020. During this period, the profit scale of individual FOF funds has also risen, from initial gains of less than 20 million yuan to nearly 1 billion yuan.
The record profits of FOF funds highlight their increasingly prominent role in diversified allocation. By the end of 2025, the complete holdings disclosed by FOF funds included stocks, bonds, ETFs, and actively managed equity products. Holdings of public REITs products reached 38. While gold ETFs were the most favored by FOF funds by the end of 2025, preliminary assessments from early in the second quarter of 2026 indicate a more cautious stance toward gold assets.
Paper Gains in Six of the Past Nine Years According to an analysis report titled "2025 Annual Report Review of FOF Funds" provided by Tianxiang Investment Consulting, public FOF funds achieved a total profit of 18.685 billion yuan in 2025. Based on Tianxiang's three-tier classification of FOF funds, hybrid FOF funds recorded the highest overall profit at 10.772 billion yuan, with an average profit per product of 24.76 million yuan. Equity FOF funds had the lowest overall profit at 128 million yuan.
The overall profitability of FOF funds stems from various asset managers. Specifically, the top ten managers all reported positive total FOF profits for the previous year. E Fund Management led with 2.702 billion yuan, followed by Xingquan Global Fund with 2.510 billion yuan. Four other public fund managers—China Europe Fund, GF Fund, China Asset Management, and Fullgoal Fund—each achieved FOF profits exceeding 1 billion yuan. Other top-ten managers included Bocom Schroders Fund, Fullgoal Fund, Southern Fund, and ICBC Credit Suisse Asset Management, with FOF profits of 931 million yuan, 754 million yuan, 653 million yuan, and 548 million yuan, respectively.
It is important to note that the 2025 profits of public FOF funds set a record high for the nine-year period since their launch in 2017. Over these nine years, FOF funds experienced paper losses in three years, while the other six years saw gains, with two instances exceeding 10 billion yuan. Prior to the current record, the highest paper gain for FOF funds occurred in 2020.
Specifically, in their inaugural year of 2017, public FOF profits were just over 30 million yuan. In 2018, amid a general market decline, FOF funds incurred losses of 464 million yuan. Starting in 2019, the market entered a phase of structural growth, and public FOF funds generated profits for three consecutive years through 2021, with profits of 2.319 billion yuan, 10.863 billion yuan, and 5.734 billion yuan, respectively. In 2022 and 2023, FOF funds faced losses due to increased market volatility, with losses exceeding 16 billion yuan and 8 billion yuan, respectively. After 2024, market conditions improved again, with FOF funds achieving a full-year profit of 5.026 billion yuan. In 2025, profits surged to over 18 billion yuan, setting the highest record in their nine-year history.
A review shows that over the past nine years, FOF profitability has continued to rise, along with the paper gains of individual products. In 2017, the maximum profit per FOF fund (counting different share classes separately) was less than 20 million yuan. By 2019, individual product profits began to exceed 100 million yuan, reaching 269 million yuan. By 2020, profits per FOF fund approached 1 billion yuan. However, as of the end of 2025, individual FOF fund profits had not yet surpassed 1 billion yuan.
Diversified Allocation Features Becoming More Pronounced The underlying assets of public FOF funds primarily consist of public funds. Over the past nine years, changes in profit scale have been closely related to underlying market conditions and assets such as actively managed equity funds. Additionally, shifts in FOF profitability are linked to product expansion and innovation in product structures. To date, FOF product types have expanded to include pension FOFs, and underlying assets have broadened from initially focusing on actively managed equity funds to include public REITs, underscoring their increasingly diversified allocation characteristics.
According to Wind statistics, based on 2025 annual report data, including top ten holdings, over 3,500 funds were held by public FOF funds by the end of the previous year. Throughout the year, passive index funds remained the most favored by FOF funds. Among these, Huaan Gold ETF was held by over 200 FOF funds, with holdings exceeding 224 million shares and a market value of over 2 billion yuan. Four other ETFs were also held by more than 100 FOF funds each: Haitong SSE Short-Term Bond ETF, Pengyang CGB 30-Year Treasury Bond ETF, ChinaAMC Hang Seng Tech ETF, and GF China Hong Kong Stock Connect Non-Bank Financial Theme ETF.
Compared to the 2025 interim reports, four of these five ETFs saw increased positions by FOF funds. ChinaAMC Hang Seng Tech ETF and GF China Hong Kong Stock Connect Non-Bank Financial Theme ETF saw increases of over 400 million shares and 100 million shares, respectively. However, Huaan Gold ETF saw a reduction of 1.5269 million shares by FOF funds in the second half of the year. Additionally, in the latter half of the year, FOF funds increased positions in futures ETFs, with ChinaAMC Feeder Soybean Meal Futures ETF seeing an increase of over 17 million shares and Da Cheng Nonferrous Metals Futures ETF experiencing an increase of more than 170 million shares.
Looking at holdings ranked 11th to 20th, FOF funds continued to favor ETFs, including equity-themed ETFs such as Harvest SSE STAR Market Chip ETF and E Fund China Hong Kong Securities Investment Theme ETF. Furthermore, actively managed equity funds, which were highly favored by FOF funds in their early days, also appeared in the 11th to 20th positions, such as Fullgoal Stable Growth and Invesco Great Wall Quality Longevity.
Notably, the complete holdings disclosed in the 2025 annual reports revealed FOF funds' comprehensive positions in public REITs. By the end of 2025, a total of 38 public REITs were held by FOF funds, with total holdings exceeding 95 million shares. The most popular among FOF funds was CICC Prologis Logistics REIT, held by 17 FOF funds. Other products, including AVIC Capital Shougang Biomass REIT, China Beijing Affordable Housing REIT, and CICC Anhui Expressway REIT, were each held by more than 10 FOF funds.
Cautious Stance on Gold Assets in the Second Quarter As FOF annual reports were disclosed, the market had already entered the second quarter, creating a three-month gap. According to the latest assessments from FOF investment research professionals, their focus for the second quarter's investment themes has shifted significantly from the end of 2025. Most notably, while gold assets were highly favored in 2025, FOF assessments for the second quarter of 2026 have turned more cautious.
Zhang Yun, head of the FOF investment department at Everbright Prameric Fund, stated that recent changes in the gold market, including fluctuations in Federal Reserve rate cut expectations, could negatively impact gold prices. However, the market experienced several sharp sell-offs in the first quarter, indicating high asset crowding, liquidity issues, and a failure of its traditional safe-haven attributes. Gold is currently in a slow recovery phase. After significant sell-offs, the筹码 structure has somewhat cleared, but risk-return characteristics such as volatility and Sharpe ratio are now entirely different from the past two years. A return to an upward trend will require time and catalytic factors.
Zhang Yun emphasized that 2026 calls for greater attention to risk control, particularly regarding risks such as periodic rises in the U.S. dollar and U.S. Treasury yields, increased expectations for liquidity tightening, and fat-tail risks from multi-asset correlated declines. Assets like gold and U.S. stocks, which previously showed high Sharpe ratios, may struggle to maintain past performance levels this year. Assets like soybean meal currently have lower attention, but agricultural assets with favorable筹码 structures are worth monitoring.
The Yingmi Dongfang Jinjiang Investment Advisory Team noted that, in practical terms, adjustments to gold assets are more tactical than structural changes to the overall allocation framework. This is primarily due to substantial prior gains and expectations for increased gold price volatility. Meanwhile, the team has increased allocations to absolute return strategies, such as CTA strategies and multi-strategy FOF products. These strategies offer greater adaptability across different market conditions and can provide more stable returns during periods of high uncertainty.
He Zhe, FOF investment director at HSBC Jintrust Fund, commented that from a multi-asset allocation perspective, gold still ranks relatively high in their assessment. However, the likelihood of new short-term highs is low. They will continue to monitor gold's trading crowding and price retracement levels to determine entry points. Currently, gold's implied volatility remains relatively high, reducing its investment appeal for the near future. In the short term, downside risks may outweigh upside potential.
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