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 public fund market data released by the Asset Management Association of China shows that by the end of February, the total size of China’s public funds reached 38.61 trillion yuan, surpassing 38 trillion yuan for the first time, and has set a new record for 11 consecutive months.

By category, in February, the size of money market funds increased by 579.511 billion yuan, the largest contribution to growth. Additionally, bond funds grew by 216.734 billion yuan, hybrid funds by 93.341 billion yuan, and FOFs (funds of funds) and QDII (Qualified Domestic Institutional Investors) also saw slight increases in size. However, equity funds decreased by 79.035 billion yuan.

A fund manager pointed out that the growth in fund size benefits from the ongoing “deposit relocation” 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, FOFs, and other stable products also benefit from this. This trend not only drives the continuous increase in public fund sizes but also reflects residents’ awakening in financial management awareness and the optimization of asset allocation structures.

Money Market Funds and Bond Funds Lead Growth

In February, more stable money market funds 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 579.511 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 annualized yield over the past 7 days was about 1.14%, with many even breaking below 1%. The top-ranking Tianhong Yu’ebao’s 7-day annualized yield was 1.001%, just shy of breaking 1%. Additionally, China Construction Bank’s Jiashengbao 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 reductions 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 as yields decline. Recently, funds such as Shenwan Lingxin Tiantianli, CITIC JianTuo Zhi Duo Xin, Zhongtai Jinqian Huijin, and GF Cash Increment have reduced their management fees, with the highest 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 size is trackable. On one hand, bank deposit rates are falling, continuing the trend of “investing in funds”; on the other hand, increased volatility in equity and bond markets drives funds to seek “safe havens,” and money market funds offer high liquidity and relatively stable returns. Given that the cost-effectiveness of money market funds exceeds that of savings accounts, their growth trend is expected to continue.

In addition, bond funds increased by 216.734 billion yuan to 10.75 trillion yuan in February, a 2.06% increase, with shares also rising by 137.009 billion units.

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

FOF Funds Surge Month-on-Month

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

Fund investors’ enthusiasm for these products is reflected in the recent emergence of “hot” new launches. As of March 25, FOFs have attracted over 65 billion yuan in total funding this year, including two products—Bosera Yingtai Zhenxuan 6-month holding and China Europe Yingxin Stable 6-month holding—each with a scale exceeding 5 billion yuan. Other notable products include ICBC Yingtai Stable 6-month holding and GF Zhihui Stable 3-month holding, each with over 4 billion yuan in assets.

Since last year, amid increased market volatility, FOFs have significantly optimized risk-return ratios through multi-asset allocation strategies, confirming their core value as professional “allocation tools.”

Nord Fund analysis suggests that the popularity of FOFs at issuance is highly aligned with customer demographics, with retail channels of banks 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. During this process, managers provide tailored strategies, open underlying holdings, and undergo stricter assessments, while banks support scale and channel resources,” said Nord Fund.

A retail officer 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 + " diversified allocation model (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 clearly dominated by “low risk,” 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 as tools for wealth management.

Slight Decline in Equity Fund Size

In February, with the Shanghai and Shenzhen indices rising to varying degrees, hybrid funds increased by over 90 billion yuan, 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, which were key factors in the contraction of ETF and stock fund sizes. CITIC Securities notes that recent global geopolitical risks combined with domestic inflation have cooled trading enthusiasm in major indices, increasing structural trading congestion, and prompting short-term battles over valuation chains, undervalued assets, and defensive stocks.

Looking ahead, many fund managers are more focused on specific sector opportunities. Cui Shutian, director of stock research at Everbright Prudence Fund, said that the past two years saw a typical valuation repair cycle in A-shares, but such conditions have never lasted three years. With limited valuation expansion space in 2026, corporate earnings will become the key factor determining market direction. Historically, during periods of earnings digestion and valuation adjustment, 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 states that the current core trading logic is not about rapid resolution of 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 will be more resilient, with AI remaining a key allocation focus. During market turbulence, performance certainty and delivery capacity are fundamental, and focusing on high-growth, high-performance quality stocks is essential to navigating short-term geopolitical and macroeconomic fluctuations.