When a fund named "HuaBao Nasdaq Select" made NIO Inc. a top holding, investors' confusion reached its peak.
Meanwhile, although NIO is striving to move away from losses, its deficits continue to mount.
Is this a case of fund managers making aggressive choices that deviate from the benchmark, or a premature bet on future value?
An investor pointed out that the manager of the HuaBao Nasdaq 100 fund did not select stocks from the Nasdaq 100 index but chose NIO Inc. instead, and shrewdly placed it as the 11th largest holding.
More sharp-eyed investors noticed that starting from the 11th largest holding, this fund contained several poorly performing Chinese concept stocks.
This led investors to question: Since NIO is not a constituent of the Nasdaq 100 or the Composite Index, does this violate any relevant regulations?
Research reveals that the fund in question is called HuaBao Nasdaq Select. Unlike ETFs that track the Nasdaq 100 Index, it is an active equity fund, allowing its holdings to be selected from all stocks listed on Nasdaq.
By the end of 2024, the fund held 4.43 million shares of NIO. In the first half of 2025, NIO's stock price retreated by 20%, yet during this period, fund managers Zhou Jing and Zhao Qiyuan chose to increase their position against the trend.
By the mid-2025 report, the fund managers' holdings of NIO had surged twofold to 13.93 million shares, accounting for 4.86% of the fund's net asset value and becoming the 11th largest holding. In the third quarter of last year, NIO's stock price finally experienced a strong rebound, skyrocketing 122% in a single quarter.
Judging by the timing of the increased position, this operation was quite skillful.
Subsequently, however, NIO's stock price declined again, plunging 33% in the fourth quarter and falling nearly 10% again this year.
If the fund managers did not reduce their NIO holdings during this period, the paper gains from the increased position have almost been completely erased.
In fact, among the fund's top ten holdings from last year to the same period this year, apart from Netflix and Marvell Technology which saw some pullbacks, other stocks were all rising, with several gaining over 40%, and Google rising 76% from last year to date.
On the other hand, the fund's net asset value has increased by only 13.65% from last year to date, while the Nasdaq Composite Index rose 21.85% over the same period, and major A-share indices repeatedly hit new highs. Some investors believe the fund has risen too slowly, failing to even beat the index.
Particularly in the last three months, the fund's net value fell over 4%, moving highly in sync with NIO's trend. This infuriated one investor, who complained while sharing their statement, noting it was the only holding in the red while others were green, all because it was heavily invested in NIO.
Investors are collectively criticizing the fund's purchase of NIO as a pitfall because NIO burns through excessive cash and continues to report losses. Data shows that from 2021 to 2024, NIO accumulated losses of 74.5 billion yuan, and lost another 15.7 billion yuan in the first three quarters of 2025.
Only by achieving profitability as soon as possible can NIO break the impression of being a "bottomless pit."
This is not an isolated case. Examining HuaBao Fund's assets, by the end of the third quarter of last year, its management scale had surged to 380 billion yuan, which seems decent?
But a breakdown reveals that money market funds accounted for 170 billion yuan, nearly half. ETF scale is massive, skyrocketing from 90 billion to 140 billion yuan, reliant on market conditions, gradually eroding active management capabilities.
The company's equity fund scale has dwindled to just 348 million yuan, already halved from the 2023 peak. Hybrid fund scale has shrunk from 30 billion to 18 billion yuan. The active management portfolio is becoming increasingly smaller. HuaBao seems to be turning into a major custodian for "indexes and cash."
The collapse of HuaBao Fund's equity scale is related to the performance of its fund managers.
The trading operations and performance of the HuaBao Overseas China Mixed Fund, managed by the company's Chief Investment Officer Zhou Jing, have drawn attention. In the first half of 2025, the fund's transaction fees were as high as 2.53 times its management fees, and its turnover rate soared from 493.95% in the same period last year to 866.99%.
This high-frequency trading significantly eroded investment returns. During Zhou Jing's over three-year management period, the fund's cumulative return was -4.13%, substantially underperforming its benchmark by nearly 35 percentage points, ranking at the bottom among peer products.
This is extremely inconsistent with the status of the fund management company's core investment officer and also exposes deficiencies in the company's risk control and long-term investment philosophy.
The issue of long-term losses in products managed by several of the company's fund managers is equally prominent.
The HuaBao Quality Life Fund, managed by Wu Xinyi, lost 4.68% last year and over 32% in the past three years.
The HuaBao Baokang Consumer Goods Fund, managed by Tang Hui, lost nearly 30% during her nearly four-year tenure, with heavy positions in the baijiu sector causing significant net value drawdowns.
Yan Xu stepped down after several funds he managed lost over 30%, and his co-manager Chen Long also left at the end of 2024 after the products he managed were halved.
Although Zhang Jintao achieved a nearly 70% rebound in the past year by heavily investing in innovative drugs, another fund he managed with a diversified portfolio still lost 10%.
These cases collectively reveal issues of strategy failure and severe performance volatility in HuaBao Fund's active equity investment domain.
Furthermore, HuaBao Fund managers frequently oversee multiple funds; Chen Jianhua manages 42 funds, Li Dongliang manages 32 funds, and many funds experience frequent manager changes.
More notably, HuaBao Yuanshi was established on March 18, 2025, with a scale of 237 million yuan, primarily investing in "dividend stocks." However, dividend stocks performed weakly in the latter half of last year. Just over a month after its establishment, institutional funds redeemed 50 million yuan, suspected to be "helper capital" withdrawing. By mid-year, its scale had fallen below the 50 million yuan liquidation threshold. On October 17, it was formally liquidated.
From birth to death, it lasted merely seven months. This became HuaBao's "Waterloo" in active equity issuance last year.
HuaBao Fund's actual controller is the state-owned enterprise Baosteel Group. However, investment income derived from HuaBao Fund is highly volatile; for example, in 2024, HuaBao Trust's investment income from HuaBao Fund even shrank by 30%.
The company's scale growth primarily relies on money market funds and ETFs to maintain appearances. They have made efforts, such as recruiting fixed-income expert Xia Ying from a bank-affiliated institution to expand the bond business. But so far, the fixed-income scale is only over 38 billion yuan, accounting for just 10%, making it an "anomaly" within the industry.
Starting in 2026, new public offering regulations take effect. The policy encourages the development of active equity: stock funds have higher subscription fees and require senior executives and fund managers to co-invest. But HuaBao's path seems contrary. In a bull market that demands active management capability, its active capability is shrinking.
In today's environment of industry transformation and intensifying competition, the ultimate survival of any fund company relies on the genuine ability to create sustained returns for its holders. It is time for HuaBao Fund to rediscover its own "active power."
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