Public fund assets break through 38 trillion yuan for the first time. Where is the money flowing?

The public fund industry is once again ushering in a shining moment.

On March 25, the latest data released by the Asset Management Association of China showed that as of the end of February 2026, the total scale of public funds in China has for the first time surpassed the 38 trillion yuan mark, reaching 38.61 trillion yuan. This marks the 11th consecutive month of historic highs for public fund scale.

In just one month, the scale of public funds has achieved a growth of over 800 billion yuan, with a month-on-month increase of 2.2%.

However, behind this impressive report card, a profound structural change in capital flows is quietly occurring. On one side, conservative products are continuously attracting capital, with fixed-income funds and “fixed-income +” funds becoming the main drivers of growth; on the other side, equity funds are rarely experiencing a counter-cyclical decline in scale. In addition, the scale of fund of funds (FOF) has increased by 12.28% month-on-month, significantly outpacing all types of funds and continuing to lead.

Breaking through the 38 trillion yuan mark

The latest figures disclosed by the China Fund Industry Association show that as of the end of February 2026, there are a total of 165 public fund management institutions in China, including 150 fund management companies and 15 asset management institutions that have obtained public fund qualifications. The total net asset value of public funds managed by these institutions reached 38.61 trillion yuan, marking the first time it has surpassed the 38 trillion yuan threshold.

Since the end of April 2025, the management scale of public funds has continuously set historical records for 11 months.

Data shows that in February, both the overall share and scale of public funds grew by more than 2%. As of the end of February 2026, the overall share of public funds reached 32.77 trillion shares, with an increase of 862.027 billion shares in a single month, growing by 2.7% compared to the end of January; the scale reached 38.61 trillion yuan, with an increase of 839.778 billion yuan in a single month, representing a month-on-month growth of 2.22%.

It is worth noting that various types of funds achieved growth in shares in February, with FOF growing by 13.02%, leading the growth rate; QDII funds followed closely with a growth rate of 7.95%.

Scale growth has shown a differentiated trend. FOF scale grew by 12.28% month-on-month, leading the pack; money market funds grew by 3.79%, while hybrid funds and bond funds grew by 2.33% and 2.06%, respectively; QDII funds saw a slight growth of 0.39%. In contrast, the scale of equity funds and other funds shrank by 1.38% and 0.27% month-on-month, respectively.

Over a longer time frame, the growth trajectory of public funds is astonishing. At the end of 2015, the total scale of public funds was only 8.4 trillion yuan; ten years later, this figure has increased by 3.6 times.

This growth is driven by three clear main lines: First, against the backdrop of “housing should not be for speculation,” household wealth is shifting from the real estate market to financial assets; second, the stock market is recovering, enhancing the profit-making effect of funds; third, following the new asset management regulations, the advantages of net worth products are gradually becoming apparent.

Huaxin Securities predicts that the potential incremental funds for public funds in 2026 will be around 877.2 billion yuan. If the recent growth rate of 10% to 15% is maintained, the era of 40 trillion yuan in public funds may be just around the corner.

Stability is key: money market and bond funds become the main “troops” for growth

Who is contributing the most to this increase of over 800 billion yuan? The answer is money market funds and bond funds.

Data shows that in February, the scale of money market funds surged by 579.511 billion yuan in a single month, making it the absolute main force driving the overall scale increase. Meanwhile, bond funds also increased by 216.734 billion yuan. Together, they contributed nearly 800 billion yuan in incremental growth, making them the “twin stars” of this round of scale increase, with scales growing by 3.79% and 2.06%, respectively, in February.

In this regard, some fund managers pointed out that this trend is a continuation of the “deposit migration” phenomenon. In a low-interest-rate environment, traditional savings are becoming less attractive, leading to a shift in household wealth allocation from “keeping in banks” to “investing in funds.” Among them, money market funds and bond funds, with their stable safety advantages, have become the “reservoir” for accommodating the transfer of deposits.

Zhu Yanqiong, the fund manager at Taiping Fund’s fixed income investment department, also believes that the decline in deposit rates and fluctuations in the equity market have highlighted the cost-effectiveness of money market funds as a “safe haven.”

It is noteworthy that although the yield on money market funds has generally dropped to around 1%, their scale continues to grow. This reflects that, in a volatile market, investors prioritize the safety and liquidity of funds over the pursuit of yield.

According to feedback from market participants, the growth in the scale of bond funds in February primarily came from retail clients subscribing to primary bond funds, secondary bond funds, and other “fixed-income +” products. With limited space for pure bond yields, “fixed-income +” products, leveraging the yield advantages of stock-bond combinations, are attracting incremental funds and becoming the main driving force behind the growth of bond fund scales.

Market analysis suggests that in February, after the A-shares hit short-term highs, some funds chose to take profits or shift towards defensive positions, promoting the growth of money market and bond fund scales.

Equity funds shrink “against the trend”: who is retreating?

In stark contrast to the popularity of fixed-income products, equity funds performed poorly in February. Despite the Shanghai and Shenzhen stock indices rising to varying degrees in February (the Shanghai Composite Index rose by 1.09%, and the Shenzhen Component Index rose by 2.03%), the scale of equity funds fell counter to the trend by 790.35 billion yuan, a decrease of 1.38%, with the latest scale at 5.63 trillion yuan. Hybrid funds, on the other hand, showed stable performance, with a slight increase of 933.41 billion yuan, a growth rate of 2.33%, bringing the latest scale to 4.10 trillion yuan.

Why did equity fund scales shrink against the backdrop of rising indices?

Guan Xiaomin pointed out: “After the stock market surged rapidly at the beginning of 2026, starting from mid-January, national team funds began to sell broad-based index ETFs, leading to a corresponding reduction in the scale of equity ETFs.”

According to data from Geshang Fund, as of the end of February, the scale of equity ETFs decreased from 3.22 trillion yuan at the end of January to 3.16 trillion yuan, with a net outflow of 635.04 billion yuan.

Among them, the CSI 300 ETF had a net outflow of 21.94 billion yuan, the CSI A500 ETF had a net outflow of 21.18 billion yuan, and the CSI 500 ETF had a net outflow of 20.09 billion yuan. Large funds continued to flow out of these broad-based index ETFs representing large-cap blue chips and core assets, directly leading to the overall decline in equity fund scales.

However, the continuous growth of hybrid fund scales over three months indicates that the “break-even kill” (redemption upon breaking even) phenomenon in actively managed equity funds has basically ended, and more funds are flowing into the actively managed equity market. Market participants believe that “fixed-income +” funds have attracted considerable capital.

FOF rises: a tool for allocation in a low-volatility era

In addition to money market and bond funds, FOF also performed impressively in February, with a single-month scale growth of 34.536 billion yuan, representing a month-on-month increase of 12.28%, making it one of the fastest-growing categories, having continuously ranked as the fund type with the largest month-on-month growth for three consecutive months.

The popularity of FOF is reflected not only in the existing scale but also in new fund launches. According to Wind data, in February, FOF raised 26 billion yuan. Looking at a longer time frame, as of March 25, FOF issuance this year reached 67.4 billion yuan, with multiple products exceeding 5 billion yuan in scale, frequently resulting in “blockbuster” launches. Since October 2025, the issuance scale of new FOF funds has maintained above 10 billion yuan for five consecutive months.

Industry insiders believe that the hot issuance of FOF is mainly attributed to its high compatibility with the current structure of retail banking channels. Against the backdrop of approximately 75 trillion yuan in time deposits maturing this year, the demand for client reinvestment is becoming more pronounced. FOF, with its “fixed-income +” diversified allocation model, balances the pursuit of excess deposit returns while ensuring liquidity, making it a core recommendation by wealth managers.

Analysts point out that the strategic shift in banking channels is a key driving force behind the current expansion of FOF. After experiencing the impacts of net value declines in previous equity funds and thematic products, banks began to reassess their product layouts, shifting their strategic focus from merely “selling single products” to “selling asset allocation solutions.” Leading banks are no longer satisfied with simple agency sales but are collaborating with fund companies to create exclusive FOF brand plans. From China Merchants Bank’s “TREE Long-term Profit Plan” to Construction Bank’s “Long Profit Plan” and Bank of China’s “Smart Investment Plan,” banks are forging a systematic and branded FOF product matrix through deep cooperation with fund companies, significantly propelling the rise of FOF funds.

(Author: Special Correspondent Pang Huawai Editor: Bao Fangming)