China's public fund assets exceed 3.8 trillion yuan for the first time, setting record highs for 11 consecutive months

Securities Times Reporter Zhao Mengqiao

On March 25, the latest data from the Asset Management Association of China (AMAC) showed that by the end of February, the total size of public mutual funds in China reached 38.61 trillion yuan, surpassing 38 trillion yuan for the first time, marking 11 consecutive months of record highs.

By category, in February, the size of money market funds increased by 579.51 billion yuan, the largest contribution to growth. Additionally, bond funds grew by 216.73 billion yuan, hybrid funds by 93.34 billion yuan, and FOFs (funds of funds) and QDII (Qualified Domestic Institutional Investors) also saw slight increases in scale, while equity funds decreased by 79.03 billion yuan.

A fund manager noted that the growth in fund size is driven by the continued “deposit shifting” trend. In a low-interest-rate environment, the appeal of traditional savings continues to weaken, and residents’ wealth allocation is undergoing structural reshaping—from “depositing in banks” to “investing in funds.” Money market funds, with their liquidity and safety advantages, have become the main force in absorbing deposit transfers; bond funds and FOFs also benefit from this. This trend not only supports the sustained increase in public fund sizes but also reflects a rising awareness of wealth management among residents and an optimization of asset allocation structures.

Money Market and Bond Funds Lead Growth

In February, more stable money market and bond funds became the main drivers of overall growth. Data shows that by the end of February, money market funds reached 15.85 trillion yuan, a surge of 579.51 billion yuan from the end of January, an increase of 3.80%.

In the context of an “asset shortage,” recent yields of money market funds have remained at low levels. As of March 25, among over 300 money market funds tracked, the average 7-day annualized yield was about 1.14%, with many even breaking below 1%. The top fund, Tianhong Yu’ebao, had a 7-day annualized yield of 1.001%, just shy of breaking 1%. Additionally, China Construction Bank’s Jiashenbao and E Fund’s Yili Cai had 7-day annualized yields of 1.18% and 1.05%, respectively.

“Money market funds mainly invest in deposits, interbank certificates of deposit, short-term bonds, and reverse repurchase agreements. Recently, the central bank has maintained a moderate stance on liquidity, with policy rates trending downward, including multiple cuts in bank deposit rates, leading to declining yields on short-term assets and consequently lower yields for money market funds,” said Guan Zhiyu, fund manager at China Europe Fund.

It is worth noting that to maintain positive returns, many money market funds have lowered management fees. Recently, funds such as Shenwan Lingxin Tiantianli, CITIC JianTuo Zhiduoxin, Zhongtai Jinqian Huijin, and GF Cash Increment have reduced their management fee rates, with the maximum cut from 0.90% to 0.25%.

朱燕琼, a fixed income fund manager at Taiping Fund, believes that the growth in money market fund sizes is understandable. On one hand, bank deposit rates are declining, continuing the trend of “investing in funds”; on the other hand, increased volatility in equity and bond markets has driven funds to seek “safe havens,” and money market funds offer high liquidity and relatively stable returns. Given that money market funds are more cost-effective than savings accounts, their growth trend is expected to continue.

Additionally, bond funds increased by 216.73 billion yuan to 10.75 trillion yuan in February, a 2.06% rise, with shares increasing by 137.009 billion units.

Market analysis indicates that after reaching short-term highs in February, A-shares continued to fluctuate, with some funds taking profits or shifting to defensive positions. The growth in money market and bond fund sizes reflects an increased demand for risk aversion amid rising market uncertainty.

FOF Funds See Significant Month-on-Month Growth

Besides the notable increases in bond and money market funds, FOF funds also saw substantial growth in February, contributing 34.536 billion yuan in a single month.

Investors’ enthusiasm for these products is reflected in the recent frequent launch of “hot” FOF products. As of March 25, a total of over 65 billion yuan has been raised from FOF offerings this year, including two products—Bosera Yingtai Zhenxuan (6-month holding) and China Europe Yingxin Stable (6-month holding)—each exceeding 5 billion yuan in size. Other notable products include ICBC Yingtai Stable (6-month holding) and FuGuo Zhihui Stable (3-month holding), each exceeding 4 billion yuan.

Since last year, amid increased market volatility, FOFs have demonstrated their core value as professional “allocation tools” by optimizing risk-return profiles through multi-asset strategies.

Norde Fund analysts believe that the popularity of FOFs in issuance is largely due to the high compatibility with customer demographics, with bank retail channels playing a key role in this expansion.

“Recently, major banks have accelerated their deployment, partnering with fund companies to launch exclusive FOF plans, shifting from single-product distribution to systematic, branded, and customized operations. In this process, fund managers provide tailored strategies, open underlying holdings, and undergo stricter assessments, while banks support scale and channel resources,” Norde Fund stated.

A retail executive from a joint-stock bank analyzed that over 50 trillion yuan in fixed-term deposits will mature this year, posing challenges for reinvestment. The three-month holding period FOF, with its "fixed income + " multi-asset approach (core bond holdings, low-volatility dividend assets, overseas equities, gold), offers higher returns than deposits while maintaining liquidity, making it a key recommendation for bank wealth managers.

Lide Fund’s statistics show that current FOF offerings are characterized by a clear “low risk dominance” pattern, aligning closely with investor preferences for stable returns and drawdown control in a low-interest-rate environment. This not only confirms investors’ high sensitivity to drawdown risk in a low-volatility era but also highlights FOFs’ core role as alternatives to deposits and wealth management tools.

Slight Decline in Equity Fund Size

In February, the Shanghai and Shenzhen stock indices rose to varying degrees, leading to an increase of over 90 billion yuan in hybrid funds, but equity funds decreased by about 79 billion yuan.

Analysts point out that the decline in equity fund size is mainly due to shrinking ETF holdings.

Statistics show that in February, the ETF market continued its decline from January, with a slight decrease of 74.1 billion yuan in total size. The net outflows of the CSI 300 ETF and the CSI A500 ETF exceeded 20 billion yuan each, making them key factors in the contraction of ETF and stock fund sizes. CITIC Securities noted that recent global geopolitical risks combined with rising domestic inflation have cooled trading enthusiasm in major indices, increased structural trading congestion, and led to short-term battles over price chains, undervalued assets, and defensive assets.

Looking ahead, many fund managers are focusing more on niche investment opportunities. Cui Shutian, director of stock research at Everbright Prudence Fund, stated that the past two years saw a typical valuation repair cycle in A-shares, but such conditions rarely last three years. With limited valuation expansion space in 2026, corporate earnings will become the key factor determining market direction. Historically, during periods of earnings-driven valuation digestion, market styles tend to shift. This year, the A-share market is expected to transition from a focus on technology growth to a more balanced mix of technology, manufacturing, and cyclical sectors.

Caitong Fund noted that the current core trading logic is not about quickly ending geopolitical conflicts but about the sustained impact of high oil prices on inflation, interest rates, and economic fundamentals. In this context, sectors with clear industry trends and strong growth prospects are more resilient, with AI remaining a key allocation focus. During market turbulence, performance certainty and execution ability are essential for core assets; focusing on high-growth, high-performance quality stocks is the way to navigate short-term geopolitical and macroeconomic fluctuations.