As 2025 draws to a close, the first batch of 26 floating-rate funds established this year have begun presenting their interim performance reports. Despite operating for less than a year, their results already show significant divergence. Among them, Yinhua Growth Smart Selection A has drawn particular attention.
As one of the first floating-rate funds, Yinhua Growth Smart Selection A (024455) is facing a dual challenge of poor performance and shrinking assets. As of December 16, its return since inception stands at -3.35%, with a net asset value per unit of 0.9665. Short-term performance is even more concerning, with a one-month decline of 12.63% and a three-month drop of 15.80%, significantly underperforming the CSI 300 Index during the same period.
More alarming than the performance slump is the fund's dramatic asset shrinkage. Data shows that as of September 30, 2025, the fund's total assets had dwindled to just 432 million yuan, down 56.5% from its initial size of 994 million yuan. During this period, the fund experienced net redemptions of 382 million units, with minimal new subscriptions. This "cliff-like" decline in assets is both a direct consequence of poor performance and a factor that could further complicate liquidity management and investment operations.
A closer look at its portfolio reveals that fund manager Wang Xiaochuan has constructed a highly concentrated allocation in the property chain and pharmaceutical sectors. The top two holdings, KE Holdings Inc-W and Jiufang Zhitou Holdings, account for 13.54% and 12.09% of the portfolio respectively, totaling over 25%. However, these stocks have fallen 18.98% and 30.01% over the past three months.
Even more severe is the 44.58% drop in Yipinhong, which accounts for 8.88% of net assets. Other major holdings like XGIMI Technology, Sinovac Biotech, and Staidson Pharmaceuticals have also declined by over 15%. The portfolio shows significant overweighting in property and related service sectors, which have been among the weakest performers in 2025. Although holdings like HIGO Group have gained 4.11% over three months, they have failed to offset the drag from the underperforming core sectors.
Facing pressure, Wang Xiaochuan explained his investment rationale in the Q3 report: "The market's economic expectations improved in Q3, with risk appetite rising. Growth-oriented tech stocks performed well, while defensive value and dividend stocks lagged. We believe the overall market remains healthy, with undervalued stocks offering absolute return potential in many sectors." He particularly emphasized optimism about innovative drugs, calling it a "domestically driven super industry cycle," and sees "asymmetric upside in property investments," citing historically low expectations, institutional positioning, and stock prices in the sector.
In stark contrast, Huashang Far Vision Return A, another floating-rate fund from the same batch, has outperformed by focusing on AI computing and other tech growth themes. This sharp divergence highlights the importance of sector allocation in a structural market.
For Wang Xiaochuan, who has over three years of management experience, the current situation is undoubtedly a test. Under the floating-rate mechanism, rapid asset outflows directly impact fund operations. Stabilizing existing shares, rebuilding investor confidence, and demonstrating stock-picking and sector allocation capabilities through actual performance will be key to turning the fund around. This also serves as a warning to investors: in structural markets, relying solely on "contrarian investing" and "value undervaluation" logic that persistently deviates from market trends may entail significant time and opportunity costs.
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