Special Topic: Focus on Q4 2025 Fund Reports: AI Applications, Commercial Aerospace, Nuclear Fusion – Who Leads the 2026 Investment Trend? Review of Q4 2025 Passive Equity Fund Reports
1. Excluding feeder funds, the total assets under management (AUM) for passive equity funds in the entire market reached 4.77 trillion yuan by the end of the fourth quarter of 2025, marking a 3.49% increase from the previous quarter. Among these, pure index stock funds accounted for 4.52 trillion yuan, while enhanced index stock funds totaled 0.25 billion yuan, representing increases of 3.26% and 7.78%, respectively, compared to the prior quarter.
2. From the perspective of new fund issuance, the total fundraising scale for new passive equity funds in Q4 2025 was approximately 816.80 billion yuan, with 183 new funds launched. This represents a decrease of 75 funds compared to the 258 launched in the previous quarter. Specifically, the issuance scale for pure index stock funds was 576.75 billion yuan across 134 funds, while enhanced index stock funds raised 240.05 billion yuan across 49 funds.
3. Overall, the major market indices showed divergence in the fourth quarter. The Shanghai Composite Index rose by 2.22%, whereas the CSI 300 Index fell by 0.23%, the ChiNext Composite Index declined by 0.73%, the Tianxiang Stock Fund Index dropped by 2.13%, and the Tianxiang Mixed Fund Index decreased by 1.23%. During the quarter, the Tianxiang Pure Index Stock Fund Index fell by 2.01%, while the Tianxiang Enhanced Index Stock Fund Index gained 0.99%.
4. Looking at fund subscription and redemption activities, the passive equity market remained generally stable in Q4 2025. Subscription units totaled 1,415.139 billion, redemption units were 1,252.391 billion, resulting in a net inflow of 162.749 billion units. Compared to the previous quarter, the net subscription volume for passive equity funds increased.
5. The secondary market trading volume for passive equity funds in Q4 2025 reached 7,320.750 billion units. Pure index stock funds dominated this activity, contributing 7,298.402 billion units to the total volume, while enhanced index stock funds accounted for 22.348 billion units traded during the quarter.
As of January 23, 2026, public funds had completed the full disclosure of their Q4 2025 reports. Based on the Tianxiang Fund secondary classification framework, this article categorizes pure index stock funds and enhanced index stock funds as passive equity funds, providing a quarterly review of their performance, scale, holdings, and management companies.
Market broad-based pure index stock funds are defined as those using full replication, optimized replication, or sampling replication methods to track market broad-based market-cap-weighted indices, without the primary goal of generating excess returns. Thematic/industry pure index stock funds track non-broad-based indices (e.g., thematic, sector, STAR Market, ChiNext, Smart Beta) using similar replication methods, also not targeting excess returns. Market broad-based enhanced index stock funds employ enhanced indexation strategies to track broad-based market-cap indices while aiming for alpha. Thematic/industry enhanced index stock funds use enhanced strategies to track non-broad-based indices with the objective of achieving outperformance.
I. Passive Equity Fund Market Review 1. Passive Equity Fund Scale Review (1) Overall Scale: Growth Compared to Previous Quarter Excluding feeder funds, the total AUM for passive equity funds reached 4.77 trillion yuan by the end of Q4 2025, a 3.49% increase from the previous quarter. Pure index stock funds accounted for 4.52 trillion yuan, and enhanced index stock funds totaled 0.25 billion yuan, up 3.26% and 7.78%, respectively. In terms of quantity, there were 2,065 passive equity funds in the market, comprising 1,594 pure index stock funds and 471 enhanced index stock funds, showing an increase from the total of 1,926 funds in the prior quarter.
(2) New Issuance Scale: Approximately 816.80 Billion Yuan in Q4; Pace Slows Compared to Previous Quarter From a new issuance perspective, the total fundraising scale for passive equity funds in Q4 2025 was about 816.80 billion yuan, with 183 new funds launched. This is a reduction of 75 funds compared to the 258 issued in the previous quarter. Specifically, pure index stock funds raised 576.75 billion yuan across 134 funds, while enhanced index stock funds raised 240.05 billion yuan across 49 funds.
2. Pure Index Stock Fund Index Fell 2.01% Overall, major market indices diverged in the fourth quarter. The Shanghai Composite Index rose 2.22%, the CSI 300 Index fell 0.23%, the ChiNext Composite Index declined 0.73%, the Tianxiang Stock Fund Index dropped 2.13%, and the Tianxiang Mixed Fund Index decreased 1.23%. During the quarter, the Tianxiang Pure Index Stock Fund Index declined by 2.01%, while the Tianxiang Enhanced Index Stock Fund Index increased by 0.99%.
Observing the annualized tracking error and annualized information ratio of passive equity funds relative to their target indices reveals that, among pure index stock funds, the average annualized tracking error for market broad-based funds was 0.84% in Q4 2025, with an average annualized information ratio of 2.63. For thematic/industry pure index funds, the average annualized tracking error was 0.89%, with an average annualized information ratio of 1.47.
For enhanced index stock funds, the average annualized tracking error for market broad-based funds was 3.94% in Q4 2025, with an average annualized information ratio of 1.49. For thematic/industry enhanced index funds, the average annualized tracking error was 3.27%, with an average information ratio of 0.98.
Within the passive equity fund universe, broad-based index ETFs are significant allocation tools. Key ETFs tracking the SSE 50, CSI 300, CSI 500, and CSI 1000 indices all posted positive average returns and positive average excess returns in Q4 2025.
Based on market averages, enhanced index funds linked to the SSE 50 ETF, CSI 1000 ETF, CSI 300 ETF, and CSI 500 ETF indices also generated positive average excess returns in Q4 2025.
II. Passive Equity Fund Product Analysis 1. Fund Flows: Net Inflow of 162.749 Billion Units in Q4; Significant Capital Inflow into Passive Equity Market Based on subscription and redemption data, the passive equity market was stable overall in Q4 2025. Subscription units totaled 1,415.139 billion, redemption units were 1,252.391 billion, resulting in a net inflow of 162.749 billion units. Compared to the previous quarter, the net subscription volume for passive equity funds increased.
2. Trading Volume: 7,320.750 Billion Units in Q4; Relatively Active Trading The secondary market trading volume for passive equity funds reached 7,320.750 billion units in Q4 2025. Pure index stock funds constituted the majority of this volume, accounting for 7,298.402 billion units, while enhanced index stock funds contributed 22.348 billion units traded during the quarter.
3. Holdings Analysis: Electronics, Non-Bank Financials, Power Equipment, Food & Beverage, and Communications are Top Five Holdings by Sector Classifying the top ten holdings of passive equity funds according to Shenwan primary industry sectors, the combined weighting of the top ten industries this quarter was 86.18%. Electronics, Non-Bank Financials, Power Equipment, Food & Beverage, and Communications were the top five sectors by weighting.
III. Fund Company Analysis As of Q4 2025, the leading managers of passive equity funds by AUM were predominantly large public fund management companies. Based on the scale of passive equity funds managed, China Asset Management (ChinaAMC) led with an AUM of approximately 794.2 billion yuan, commanding the highest market share at about 16.65%. Companies including E Fund Management, Huatai-PineBridge Fund Management, Southern Asset Management, Harvest Fund Management, Fullgoal Fund Management, Guotai Asset Management, GF Fund Management, China Universal Asset Management, and HuaBao Fund Management ranked prominently, each managing over 100 billion yuan. Leading firms exhibited higher and more stable market shares, indicating little significant change in the overall market structure for passive equity funds.
Within passive equity funds, pure index stock funds dominate. ChinaAMC is the most prominent player in this segment, with a market share of 17.27% and an AUM of approximately 780.8 billion yuan. It is followed by E Fund, Huatai-PineBridge, Southern Asset Management, and Harvest Fund, all with market shares exceeding 5%. Flagship pure index stock funds from top managers include ChinaAMC CSI 300 ETF, E Fund CSI 300 ETF Initiating, Huatai-PineBridge CSI 300 ETF, Southern CSI 500 ETF, and Harvest CSI 300 ETF. Generally, the largest pure index stock funds are primarily broad-based market index funds.
In terms of enhanced index stock fund scale, E Fund holds a leading market position with a market share of 9.98% and an AUM exceeding 20 billion yuan. Fullgoal Fund, China Universal Asset Management, and ChinaAMC follow closely, each with market shares over 5% and AUMs of 19.6 billion yuan, 14.1 billion yuan, and 12.8 billion yuan, respectively. Representative top enhanced index funds include E Fund SSE 50 Index Enhanced A, Fullgoal CSI 300 Index Enhanced A, China Universal CSI 300 Index Enhanced A, and ChinaAMC CSI 500 Index Enhanced A. Analysis of the largest enhanced index funds by size shows that the market mainstream consists primarily of enhanced funds tracking broad-based market indices.
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