Active equity funds displayed a significant performance split during the first half of the year. While 199 funds achieved returns exceeding 100%, a substantial number of products faced severe drawdowns, with nearly 1,600 funds across the market recording negative returns for the period.
The bottom of the performance rankings was dominated by two funds managed by Li Bo of Cinda-Aoyuan Fund, which took the top two spots for worst performance. Sectors such as consumer, healthcare, Hong Kong stocks, and Hong Kong Stock Connect-themed funds were major areas of loss, presenting a sharp contrast to the stellar performance seen in technology and growth-oriented funds. The performance gap between the best and worst funds exceeded 217 percentage points.
Cinda-Aoyuan Bojian Growth One-Year Fixed Open Fund A recorded the worst performance in the active equity market with a decline of 34.28%. Managed by Li Bo, the fund had a size of 331 million yuan. Another fund under his management, Cinda-Aoyuan Xingyi Fund A, fell 33.63%, ranking second from the bottom with a size of 1.328 billion yuan. These are the only two funds managed by Li Bo, and their placement at the bottom of the rankings for the first half signifies a complete loss for his portfolio.
At the end of the first quarter, both funds held significant positions in stocks from sectors including Hong Kong-listed internet companies, automobile manufacturers, property, and trendy toys. For instance, the top ten holdings of Cinda-Aoyuan Bojian Growth One-Year Fixed Open Fund A included MGP, Roborock, Li Auto Inc, JAC Motors, Binjiang Group, Insta360, BAIC BluePark, Xiaomi Corporation, Pop Mart, and Alibaba Group, indicating a relatively diversified investment focus.
GF Value Leadership Fund A declined by 33.60%, ranking third from the bottom. Managed by Lin Yingrui, the fund has a size of 3.22 billion yuan. Notably, this fund has underperformed its benchmark by 38 percentage points year-to-date, placing it at the very bottom of its peer ranking.
This fund's top ten holdings in the first quarter were exclusively airline stocks, including Spring Airlines, Tongcheng Travel, China Express Airlines, China Eastern Airlines, China Southern Airlines, Air China, Juneyao Air, Dafeng Industrial, Runbei Aviation Technology, and Damai Entertainment. The aviation sector faced overall pressure in the first half, and the concentrated investment strategy amplified the fund's net asset value decline during the sector's downturn.
Tongtai Great Health Theme Fund A fell 33.32%, ranking fourth, and is co-managed by Ma Yi and Mai Jianpei. Since its inception in April 2021, this fund has accumulated losses of 70%, remaining deeply mired in negative territory.
In terms of holdings, the fund shifted its primary allocation in the first quarter from innovative drug and medical device companies to firms leading in brain-computer interface (BCI) technology deployment. The fund managers stated in their quarterly report that this did not reflect a negative view on the innovative drug sector, but rather, at the current juncture, they see greater explosive potential in the frontier field of BCI, leading them to increase its allocation weight.
Looking ahead, the managers believe that driven by top-level design in the national development plan, medical insurance pricing policies, and priority approval mechanisms, BCI is accelerating from technological validation towards initial commercialization. It has the potential to evolve from a conceptual theme into a growth sector with promising earnings prospects. However, based on first-half performance, this portfolio adjustment has yet to yield the anticipated results.
Overall, the bottom five funds on the loss list all posted returns worse than -33%. This stands in stark contrast to the top-performing fund, which gained 183.67%, creating a performance gap of over 217 percentage points between the best and worst performers.
Performance Breakdown by Sector
The consumer sector was one of the worst-performing areas in the first half. Among the 20 worst-performing funds, consumer-themed funds occupied nearly half the spots: Guolian Brand Preference Fund A fell 33.10%, Caitong ZG Quality Consumption Fund A declined 32.88%, and Oriental Urban Consumption Theme Fund A dropped 32.01%.
The healthcare sector remained sluggish under dual pressures from normalized centralized procurement and slower-than-expected innovation realization, leading to poor performance for healthcare-themed funds. Tongtai Great Health Theme Fund A fell 33.32%, with its five-year cumulative return down 72.51%. Xinhua Medical Innovation Fund A declined 31.05%.
Hong Kong stock and Hong Kong Stock Connect-themed funds also underperformed. HSBC Jintrust Hong Kong Stock Connect Dual-Core Strategy Fund fell 29.97% with a size of 2.011 billion yuan. SPDB Allianz Hong Kong Stock Connect Consumption Fund A declined 28.96%. Guotai Hong Kong Stock Connect Select Fund A dropped 28.25%. Qianhai开源沪港深裕鑫 Fund A fell 28.22%. Greenland Hong Kong Stock Connect臻选 Fund A declined 26.18%, with a size of only 3 million yuan.
Additionally, sectors like cyclical industries and defense also faced pressure. SPDB Allianz Cycle优选 Fund A fell 30.54%. Western利得 Cycle鑫选 Fund A declined 29.76%. AVIC Military-Civilian Integration Select Fund A dropped 29.15%.
Fund Company Performance Overview
From a fund company perspective, Zhong Ou Fund led with 53 underperforming products, followed by GF Fund with 52, and Harvest Fund with 51. Other major firms like China Merchants Fund, Dacheng Fund, Fullgoal Fund, ChinaAMC, and Penghua Fund also had a high number of funds in the red.
The first half of the year has concluded. Whether sectors like consumer and healthcare can experience a valuation recovery in the second half remains contingent on further clarity regarding fundamental conditions and policy developments.
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