A fund manager has delivered a remarkable 170% return in just half a year, overseeing a surge in assets under management from 8.9 billion to a staggering 56.5 billion yuan.
Subsequently, he has chosen to reduce his portfolio's exposure.
The quarterly reports for the various products managed by Jincai Jin of Chutong Fund have been released, revealing impressive figures. The Chutong Fuxin Fixed Open Hybrid Fund achieved a return of 172.94% in the first half of the year, ranking second among active equity funds. Its performance over one-year, three-year, five-year, seven-year, and ten-year periods all ranked first in their respective categories.
Assets under management skyrocketed from 8.9 billion yuan at the end of the first quarter to 56.5 billion yuan, an increase of more than fivefold. However, his primary action was to reduce the fund's equity allocation.
The equity portfolio weighting was lowered from 93.51% to 84.25%, while the proportion of the top ten holdings decreased from 87.84% to 72.32%. This was not a minor adjustment but a reduction on both fronts—overall allocation and concentration.
With such substantial gains, why not continue to press the advantage?
A Shift in Strategy
First, examining the holdings reveals a significant change. For the Chutong Growth Select fund, six new stocks entered the top ten holdings, while six exited.
The newcomers are Nanya New Materials Co., Ltd., Sanhuan Group Corporation Ltd., Defu Technology Co., Ltd., Fenghua Advanced Technology Holding Co., Ltd., Boqian New Materials Co., Ltd., and Huazheng New Material Co., Ltd.. The stocks that were removed are primarily from the optical module and PCB sectors, including Zhongji Innolight Co., Ltd., Shengyi Electronics Co., Ltd., Yongding Co., Ltd., Wus Printed Circuit Co., Ltd., Shengyi Technology Co., Ltd., and FiberHome Telecommunication Technologies Co., Ltd..
The distinction is clear: the exited positions are largely in optical modules and PCBs, while the new entrants are all upstream materials—copper-clad laminates, copper foil, and MLCC passive components.
In the quarterly report, Jin explained candidly that a quarter ago, supply constraints were mainly concentrated in specific areas like EML and DSP chips within optical chips, glass fiber cloth, and HVLP4 copper foil. By the second quarter, the shortages had spread, with MLCCs and upstream PCB materials also becoming supply-constrained. His approach was to allocate capital to the areas experiencing the tightest supply.
However, this is not the most critical information. The core insight is that while switching sectors, he also pulled back some capital. The overall equity allocation was reduced by nearly 10 percentage points, and concentration dropped by 15 percentage points.
In other words, Jin shifted his bets from optical modules to upstream materials while simultaneously reducing the overall risk exposure. Actively taking profits during a winning streak is considerably more challenging than continuing to aggressively invest.
Examining the Investment Track Record
Jin's true strength lies not merely in heavily investing in AI but in consistently positioning himself ahead of time in the segments with the greatest potential for significant gains.
In the fourth quarter of 2023, while the market was still speculating on AI concepts, he had already determined that capital expenditures from major North American companies were genuinely increasing, signaling a shift from thematic investing to the phase of fundamental realization. Consequently, he purchased shares in Zhongji Innolight Co., Ltd., Sunny Optical Technology (Group) Company Limited (referenced as New易盛 in context), Wus Printed Circuit Co., Ltd., and Tianfu Communication Co., Ltd.. While others were betting on expectations, he was profiting from actual earnings.
In the third quarter of 2024, following OpenAI's release of the o1 model, he wrote in the quarterly report: "The growth space for inference-side computing power demand is vast, and the current demand growth may only be the beginning." This statement has since been repeatedly validated.
In the first quarter of 2025, with the emergence of DeepSeek, market enthusiasm for domestic computing power was ignited. Jin made a bold decision—essentially clearing his positions in overseas computing power and pivoting towards domestic alternatives. At the time, this move seemed entirely logical; under the DeepSeek narrative, domestic AI capital expenditures appeared poised to replicate the overseas trajectory.
Then, the market taught him a lesson.
Domestic models saw their prices rise and then fall back, while the user numbers and token consumption for large language models from leading overseas companies experienced "exponential" high-speed growth, with Annual Recurring Revenue (ARR) surging significantly. In the second quarter report, Jin frankly admitted that in the months following DeepSeek's appearance, the performance of domestic models fell short of expectations, while the business model for overseas AI had already formed a closed loop.
In simple terms, he acknowledged the mistake. Then, he decisively corrected course, substantially rebuilding positions in overseas computing power.
The operations following this correction culminated in the "major portfolio reshuffle" of the second quarter of 2026—the top ten holdings were completely replaced, but the overall direction remained unchanged: still bullish on AI, but with the focus shifting from optical modules to upstream materials in short supply.
Perspective on the Market Outlook
In the quarterly report, he offered two key assessments.
First, supply chain constraints are expected to persist for a considerable time and are unlikely to be fundamentally resolved in the short term. The logic is that the AI industry's foundational scale is expanding, and the explosion of Agent AI is upgrading computing power consumption from "conversational consumption" to "task consumption," with the computing power required for single tasks multiplying. Upstream material production expansion takes time, demand growth is outpacing supply growth, and the supply gap is expected to persist.
Second, price elasticity in upstream bottleneck sectors is cyclical, and sector volatility is inevitably set to increase. He advises investors to view historical performance rationally, diversify risks through balanced portfolio allocation, and reduce the transaction costs associated with frequent market timing.
The first statement is bullish, the second is a risk warning. Read together, they are particularly noteworthy—when someone who has gained 170% in half a year tells you "volatility is about to increase," it's advice worth heeding.
Another detail worth noting is that Jin repeatedly emphasizes he is not a technology-themed fund manager but an all-market fund manager; it just so happens that the fastest-growing investment targets are currently within the AI industry chain. His investment framework is "sector prosperity + individual stock potential + dynamic optimization"—allocating to whichever sector exhibits the highest growth momentum.
This implies that if the next high-growth sector emerges, he would not hesitate to switch his focus.
The Challenge of Managing $56.5 Billion
Finally, there is a practical consideration. What does 56.5 billion yuan represent? The Chutong Growth Select fund alone has surpassed 20 billion yuan. Within the A-share active equity fund universe, this scale is quite substantial.
However, as size increases, the difficulty of portfolio adjustments rises. For a 20-billion-yuan fund to purchase a single stock, the market impact cost can be significant. Furthermore, excessive concentration can dilute the advantages of active management.
This is also reflected in the purchase restriction measures implemented: starting in May, daily purchase limits were tightened from 10,000 yuan to 100 yuan, almost equivalent to closing the door to new investments. It was only recently, following a market pullback, that the limit was relaxed back to 10,000 yuan. This pacing essentially controls the speed of further asset growth.
Here is a fund manager who earned 170% in half a year, quintupled his assets under management, yet is actively reducing his portfolio's risk. What do you think is on his mind?
He might be thinking quite simply: first, protect the profits; then, wait for the next opportunity.
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