In the first quarter of 2026, electricity and AI applications have become consensus investment themes, while funds with high turnover have fallen out of favor. The latest investment strategies of well-known fund managers such as Zhang Kun and Ge Lan have been revealed.
On the evening of April 24, Kweichow Moutai Co.,Ltd. disclosed its first-quarter results, reporting a 6.54% year-on-year increase in revenue and a 1.47% rise in net profit attributable to shareholders, maintaining positive growth in both top and bottom lines.
Prior to this, regional leaders such as Lao Bai Gan Jiu and Yingjia Gong Jiu also reported positive growth in their first-quarter earnings. The following day, both companies' stock prices surged to the daily limit.
However, a curious trend has emerged: investors are retreating.
By the end of the first quarter, the number of shareholders in Kweichow Moutai Co.,Ltd., Lao Bai Gan Jiu, and Yingjia Gong Jiu had decreased by 5%, 3.5%, and 4% respectively compared to the previous quarter. Notably, Lao Bai Gan Jiu saw a reduction of 17,500 shareholders compared to the same period last year.
Billion-yuan funds that held significant positions in Moutai are also reducing their stakes.
Liu Yanchun's Invesco Great Wall Emerging Growth Mixed fund sold over 200,000 shares of Kweichow Moutai Co.,Ltd. during the first quarter. Zhu Shaoxing's Fullgoal Tianhui Growth Mixed fund made a substantial reduction of 520,000 shares of Kweichow Moutai Co.,Ltd., representing a current market value of approximately 760 million yuan.
Zhang Kun's E Fund Blue Chip Selected Mixed and E Fund Quality Selected Mixed funds went further, reducing their holdings in all major positions including Kweichow Moutai Co.,Ltd., Wuliangye, Luzhou Laojiao, and Shanxi Fenjiu. The reduction in Kweichow Moutai Co.,Ltd. was particularly notable at approximately 20%.
This selling activity doesn't indicate that these star fund managers have turned bearish on baijiu stocks. Rather, it results from continuous redemptions by fund investors, forcing managers to sell assets passively.
Invesco Great Wall Emerging Growth Mixed experienced 1.117 billion yuan in redemptions during the first quarter, while receiving only 226 million yuan in new subscriptions. Fullgoal Tianhui Growth Mixed saw 892 million yuan in redemptions against just 126 million yuan in subscriptions.
Zhang Kun's E Fund Blue Chip Selected Mixed and E Fund Quality Selected Mixed funds faced even more significant outflows, with redemptions of 1.916 billion units and 263 million units respectively, compared to subscriptions of only 431 million units and 62 million units during the same period.
According to regulatory requirements for active funds, holdings in a single stock cannot exceed 10% of the fund's net asset value. This constraint means that despite Moutai's relatively stronger performance, its more stable stock price and higher position value in fund portfolios have made it subject to greater selling pressure.
Fund managers generally express that the current issue with consumer stocks like baijiu isn't their fundamental performance, but rather investors' excessive pessimism about the sector's prospects.
In his quarterly report, Zhang Kun noted that market judgments about domestic demand continue to follow past linear extrapolations, remaining generally pessimistic. He stated that "current prices of quality equities show significant deviation from their intrinsic value. The 'market mood' has entered a phase of intermittent melancholy, using short-sighted measurements to gauge the depth of evergreen trees."
Liu Yanchun similarly pointed out in his quarterly report that China's consumer confidence index has bottomed out and begun recovering since mid-2025. He believes capital markets significantly underestimate China's economic development potential, particularly showing insufficient confidence in domestic demand sectors.
Regarding the redemptions and selling driven by this pessimistic outlook, Zhang Kun argues that markets are overly concerned about long-term population decline while failing to fully recognize that "effective consumer population" is more crucial than "total population," with the former determining purchasing power per unit.
He illustrated this point in his quarterly report: "The US consumer market with 350 million people is larger than China's consumer market with 1.45 billion people, while India's consumer market with the same 1.45 billion population is only about one-sixth the size of China's."
This conversely suggests that China's domestic consumption actually has substantial room for growth in the future.
"Do we still believe that each generation of Chinese will live better than the previous generation? If the answer is yes, then current difficulties are cyclical rather than structural. The next generation of Chinese will purchase higher quality and greater quantities of goods and services throughout their lifecycle compared to the current generation," Zhang Kun asserted.
The resulting increase in mass purchasing power will largely benefit leading brands across various sectors.
"Typically, consumers struggle to remember more than three brands within a single category. A leading mobile phone manufacturer captures 85% of the industry's profits with just 20% of global sales volume. A leading baijiu producer obtains 50% of the industry's profits with only 2% of national sales volume. Three top AI models—Claude, GPT, and Gemini—account for over 90% of global model revenues," Zhang Kun exemplified.
The fund manager, known for his consistent investment style, reiterated his long-term confidence in the economic outlook and consumer sector.
He mentioned in the quarterly report that core city secondary home prices have gradually stabilized, hotel industry RevPAR has turned positive, and leading restaurant chains have seen positive same-store growth in the first quarter. These indicators suggest that public consumption confidence is gradually recovering. "Although the upward slope remains relatively gentle, the direction is certain. We have already seen glimpses of endogenous economic stabilization," he concluded.
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