11 consecutive increases! Public fund assets first surpass 3.8 trillion yuan!

On March 25, the China Securities Investment Fund Industry Association released the latest data on the public fund market. As of the end of February 2026, the total size of public funds in China reached 38.61 trillion yuan, surpassing 38 trillion yuan for the first time, marking the 11th consecutive month of record highs.

By type, in February, money market funds grew by 579.51 billion yuan, the largest contributor to the increase. Additionally, bond funds increased by 216.73 billion yuan, hybrid funds by 93.34 billion yuan, and FOFs and QDII funds also saw small-scale growth. However, equity funds decreased by 79.03 billion yuan.

Some fund managers noted that the growth in fund size is driven by the continued “deposit migration” trend. In a low-interest-rate environment, the appeal of traditional savings weakens, and residents’ wealth allocation is undergoing structural reshaping—from “bank deposits” to “fund investments.” Money market funds, with their liquidity and safety advantages, have become the main force in transferring deposits; bond funds and stable products like FOFs also benefit from this. This trend not only supports the sustained increase in public fund sizes but also reflects a awakening of residents’ financial awareness and an optimization of asset allocation structures.

Money Market and Bond Funds Lead Growth

In February, more stable money market and bond funds led the overall growth in fund size. 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 some even falling below 1%. The leading Tianhong Yu’e Bao’s 7-day annualized yield was 1.001%, very close to breaking 1%. Other funds like Jianxin Jiashenbao and E Fund Easy Finance had yields of 1.18% and 1.05%, respectively.

“Money market funds mainly invest in deposits, interbank certificates of deposit, short-term bonds, and 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 money fund yields,” said Guanzhi Yu, fund manager at China Europe Fund.

Notably, to maintain positive returns, several money funds have lowered management fees. Recently, funds such as Shenwan Lingxin Tian Tian Li, CITIC Construction Investment Zhiduoxin, Zhongtai Jinqian Huijin, and GF Cash Increase have reduced their management fees from a maximum of 0.90% to as low as 0.25%.

Taiping Fund fixed income investment department fund manager Zhu Yanqiong believes that the growth in money fund size is predictable. On one hand, bank deposit rates are declining, continuing the deposit migration trend; on the other hand, increased volatility in equity and bond markets drives funds to seek “safe havens.” Money funds offer high liquidity and relatively stable returns, making them attractive. Given their cost-effectiveness compared to savings accounts, this 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 an increase of 137.01 billion units in share count.

Market analysis indicates that, on one hand, after reaching short-term highs, A-shares continued to fluctuate in February, prompting some investors to take profits or shift to defensive assets. The growth in money and bond funds reflects increased risk aversion amid market uncertainty.

FOF Funds See Sharp Month-on-Month Growth

Besides bond and money market funds, FOFs (funds of funds) also saw significant growth in February, contributing 34.54 billion yuan in new assets.

Investors’ enthusiasm for these products is reflected in the recent surge of “hot” launches. By March 25, a total of over 65 billion yuan had been raised from FOF issuances this year. Notable products include Bosera Ying Tai Zhenxuan 6-month holding, China Europe Ying Xin Stable 6-month holding, each with over 5 billion yuan in scale, as well as ICBC Ying Tai Stable 6-month holding and Fu Guo Zhihui Stable 3-month holding, each exceeding 4 billion yuan.

Since 2025, amid increased market volatility, FOFs have demonstrated their ability to optimize risk-return profiles through multi-asset allocation strategies, confirming their core value as professional “allocation tools.”

Norde Fund analysis points out 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. Managers provide tailored strategies, open underlying holdings, and undergo stricter assessments, while banks support scale and channel resources,” Norde Fund stated.

Additionally, a retail executive from a joint-stock bank noted that in 2026, over 50 trillion yuan in fixed-term deposits will mature, posing challenges for reinvestment. The 3-month holding period FOF, with its “fixed income + diversified” approach (core bond allocation, low-volatility dividend assets, overseas equities, gold), offers both higher returns and liquidity, making it a key recommendation for bank wealth managers.

Lide Fund’s data shows that current FOF offerings tend to favor “low risk” strategies, aligning with investor preferences for stable returns and drawdown control in a low-interest-rate environment. This not only confirms investors’ high sensitivity to drawdowns during low-volatility periods but also underscores FOFs’ role as alternatives to deposits and as wealth management tools.

Slight Decline in Equity Fund Size

In February, both 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.

Analysis suggests that the decline in equity fund size is mainly due to shrinking ETF holdings. Data shows that in February, the ETF market continued its January decline, with a slight reduction of 74.1 billion yuan in size. The net outflows from the CSI 300 ETF and the CSI A500 ETF exceeded 20 billion yuan each, heavily dragging down overall ETF and stock fund sizes. CITIC Securities pointed out that recent global geopolitical risks combined with domestic inflation have cooled trading enthusiasm in major indices, while structural trading has increased, leading to short-term battles over valuation chains, undervalued assets, and defensive stocks.

Looking ahead, many fund managers are focusing more on specific sector opportunities. Cui Shutian, director of stock research at Everbright Prudence Fund, said that the past two years saw a typical valuation recovery 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 influencing market direction. Historically, during periods of earnings-driven valuation digestion, market styles tend to shift. This year, A-shares are expected to transition from a focus on technology growth to a mix of technology, manufacturing, and cyclical sectors.

Caitong Fund noted that the current core trading logic is not about a quick end to the war 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 high prosperity are more resilient, with AI remaining a key allocation focus. During market turbulence, performance certainty and the ability to realize earnings are fundamental. Focusing on high-growth, high-performance quality stocks offers the best chance to weather short-term geopolitical and macroeconomic fluctuations, and patience is advised.