The first half of 2026 proved to be a standout period for active equity funds, with Yan Kai of Orient Fund emerging as a particularly notable manager. By the end of the second quarter, his Orient Huixin A fund had delivered a year-to-date return of 167.25%, securing third place among actively managed funds that doubled in value. Close behind, his Orient AI Theme A fund posted a 166.72% return, ranking fourth. These two veteran funds, launched in 2015 and 2016 respectively, both doubled their value, enjoying a brief moment in the sun during the first half of the year.
The explosive performance attracted a massive inflow of capital. For instance, the Orient AI Theme A fund's assets swelled from 4.847 billion yuan at the end of 2025 to 35.125 billion yuan by June 30, a more than sixfold increase in six months. Its share count also expanded from 3.014 billion to 8.204 billion. Orient Huixin A followed suit, with its scale jumping from 291 million yuan to 4.572 billion yuan, and its share count reaching 1.088 billion.
However, just as the fund reached its peak size, its net asset value (NAV) took a sharp dive. In July, the market experienced a sudden reversal, leading to severe corrections for both funds. Orient Huixin A plummeted 33% in a single month, while Orient AI Theme A fell 27%. Despite a slight recovery in recent days, as of August 6, the Orient AI Theme A fund's year-to-date return barely stayed at 104%, while Orient Huixin A had narrowed to 89%. The funds that had doubled in value in the first half quickly turned sour for investors who chased the rally at the peak, illustrating the dangers of buying at a high. An investor who bought Orient AI Theme A at the close on June 30 and held it until August 6 would have suffered a loss of 20%.
The fund's purchase restriction trajectory tells a revealing story. On May 16, when the NAV was still in the 3-yuan range, the fund first suspended subscriptions over 1 million yuan. As the NAV accelerated upwards, reaching 4.3302 yuan on June 30, the limit was tightened to 100,000 yuan on the same day. By July 10, although the NAV had fallen from its July 9 peak of 4.3666 yuan to 4.0877 yuan (a single-day drop of 6.39%), the purchase limit was further reduced to 10,000 yuan, effectively closing its doors to nearly all new investors.
A dramatic twist occurred on July 20. At that point, the NAV had dropped from a brief rebound of 3.6432 yuan on July 21 to 3.0914 yuan, a single-day decline of 5.01%. Counterintuitively, the fund then relaxed the purchase limit from 10,000 yuan back to 100,000 yuan. The very next day, July 21, the NAV surged 17.85% to 3.6432 yuan. Over the following twelve trading days, the NAV declined on six of them: down 6.5% on July 28, down 7.01% on July 30, and down 9.86% on August 3. From "rejecting large investors" to "almost closing the door" and then "welcoming investors back," the purchase limit was adjusted repeatedly over two months.
Looking at the portfolio, the Orient AI Theme A fund's second-quarter top holdings were exclusively in semiconductor equipment and materials stocks. These included Zhongke Feice, Xinyuan Micro, Zhongwei Company, Huahai Qingke, Northern Huachuang, Jingce Electronics, Fuchuang Precision, Tuojing Technology, Hanwuji, and Shengmei Shanghai. This highly concentrated tech-growth style, which proved to be a sharp spear during the rally, became a heavy burden during the downturn.
Regarding the outlook, Yan Kai stated in the quarterly report that AI is being continuously deployed and integrated into daily life, driving sustained demand for high-performance, low-power, and highly integrated AI chips. The surge in AI inference demand is simultaneously boosting global demand for memory chips. This robust demand is forcing the industry to increase research and development in advanced semiconductor manufacturing processes. As technical hurdles are overcome, the semiconductor industry is poised to enter a new growth cycle. With rising global tech competition and a greater push for supply chain self-sufficiency, China is intensifying industrial support policies, including tax incentives and talent development programs, to accelerate the localization of chip production. Independent chip development and manufacturing can reduce reliance on external supply chains and achieve self-control over key technologies, thereby strengthening the foundation for the digital economy. However, for investors who bought in at the peak, the road to recovery will be long. Based on the NAV of 3.31 yuan on August 6, compared to the high of 4.33 yuan on June 30, the fund would need to rise by approximately 30% just to return to that starting point.
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