The scale shrank by over 80 billion! Behind Liu Yanchun's Waterloo, the Invesco Great Wall Equity Sector faces challenges

Ask AI · How does Invesco Great Wall break free from star dependency syndrome?

As an established public fund manager, Invesco Great Wall has long been a benchmark for “equity-based” integrity in the mutual fund industry.

The core support for Invesco Great Wall’s equity business is a clear development path— the “star-making” model— that has been repeatedly validated by the market.

Looking back over the past twenty-plus years, from early figures like Wang Penghui, to later stars like Yu Guang and Yang Ruiwen, and to the industry’s most influential “top-tier” fund manager Liu Yanchun, Invesco Great Wall has always understood the leverage effect of star fund managers: with a key individual, a distinctive label, and an extreme investment style, they can attract hundreds of billions or even trillions of yuan in capital inflows.

This “star-making” operational approach peaked during the bull market of core assets from 2019 to 2021. At that time, driven by continued consumption sector dividends, Liu Yanchun’s heavy holdings in liquor and his nearly “unchanged” investment style led to outstanding performance. His management scale broke through 116.3 billion yuan in the first quarter of 2021, making him one of the few “trillion-top-tier” fund managers in the history of public funds.

Behind the scenes, Invesco Great Wall also seized this opportunity to complete a transformation from “investment research-driven” to “traffic-driven,” since the market halo of star fund managers is far more memorable to investors than a steady research team.

However, the “star-making” model has inherent flaws: the peak of a star fund manager’s career often coincides with the company’s operational risk peak. When market styles reverse, those investment models once favored by the market can quickly become performance drag, and the so-called star fund managers can rapidly fall from grace. Take Liu Yanchun as an example: starting in the second half of 2021, the bubble in core assets burst completely, and the consumer sector entered a prolonged deep adjustment cycle. Although Liu’s investment style remained largely unchanged—still holding liquor and Hong Kong internet stocks—his funds’ performance plummeted. He shifted from being a market darling to a target of criticism among retail investors.

Data from Tiantian Fund shows that as of December 31, 2025, Liu Yanchun’s management scale shrank to 31.48B yuan, evaporating over 80 billion yuan from its peak. His flagship product, Invesco Great Wall Emerging Growth Hybrid A, lost over 30% in the past three years, with the fund size dropping from over 58 billion yuan at its peak to less than 19 billion yuan.

Of course, attributing all problems solely to Liu Yanchun would be unfair. Currently, Invesco Great Wall faces multiple thorny issues in its fund manager team management.

On one hand, the overall performance of fund managers is underwhelming. Besides Liu, Yang Ruiwen, managing over 20 billion yuan, also has mediocre results. His flagship, Invesco Great Wall Preferred Selection Hybrid, achieved returns of 24.55%, 50.11%, and 13.51% over the past three, two, and one years, respectively—beating the average peer returns of 17.65%, 42.99%, and 27.35%. While it outperformed peers over two and three years, its one-year return lagged nearly half behind the average, and its size declined from 7.33 billion yuan in 2021 to 131.74B yuan at the end of 2025.

On the other hand, the company also faces serious talent attrition among fund managers. For example, on May 17, 2025, Invesco Great Wall announced eight fund manager changes simultaneously, including the departure of top-performing manager Bao Wuke. Bao Wuke is a rare “double ten” fund manager (over 10 years of experience, annualized return over 10%), with a management scale once exceeding 20 billion yuan. His flagship, Invesco Great Wall Energy Infrastructure, delivered a total return of 374.75% during his tenure, ranking in the top ten industry-wide over three years. Losing such a high-quality manager is undoubtedly a significant blow.

It’s worth noting that as core fund managers leave, Invesco Great Wall’s investment research system also suffers a major impact.

Public information shows that the core structure of Invesco Great Wall’s research system is based on a fund manager responsibility system, where management does not interfere with investment decisions, giving fund managers full autonomy; the evaluation system emphasizes long-term performance, with three- and five-year results as primary criteria, complemented by quarterly style reviews to ensure investment styles are “explainable and repeatable.” In research collaboration, researchers and fund managers work closely within the same department, with high efficiency in translating research into investment; the fixed income team also adopts an integrated research management approach covering macro, interest rates, and credit.

However, this seemingly comprehensive research system has faced severe challenges recently. On one hand, there is a serious disconnect in value-oriented research strength, as the departure of high-quality value players like Bao Wuke has weakened the company’s voice and competitiveness in value investing. On the other hand, the alignment between fund managers’ styles and market trends has continued to decline. In emerging sectors like growth, technology, and AI, Invesco Great Wall lacks influential industry leaders, making it difficult to generate new performance growth points.

More critically, the “star-making” model is no longer sustainable. Relying on a single star fund manager to drive scale growth is extremely risky in today’s market environment. When star managers underperform or their scale shrinks, the company faces the dilemma of “no stars to create, no one to carry the load.” Meanwhile, industry competition has shifted profoundly: leading public fund managers are moving toward platformization, diversification, and indexing, while Invesco Great Wall remains heavily dependent on “star dependency,” with a clear lag in strategic transformation.

Index Funds Breakthrough: Seemingly a Blue Ocean, but Actually a Dilemma

Faced with the continued contraction of equity business, Invesco Great Wall is pinning hopes on index fund development. Recently, the company has increased its layout of ETFs, index-enhanced products, and other passive investment offerings, attempting to shift toward indexing to reduce reliance on star active managers and find new growth points.

From an industry trend perspective, index funds are indeed a key growth area for public funds. As investor structures mature, institutionalize, and ETF tools become more prominent, passive investing is expanding rapidly. Wind data shows that by the end of 2025, the total size of domestic public index funds exceeded 30 trillion yuan, with ETFs accounting for over 60%, making it one of the fastest-growing segments in the industry.

Invesco Great Wall has also tried to seize this opportunity. The company has launched broad-based ETFs, sector-themed ETFs, Smart Beta index funds, covering sectors like CSI 300, CSI 500, STAR Market 50, new energy, semiconductors, and consumer sectors. It has also increased its focus on index-enhanced funds, aiming to generate excess returns through active management on top of passive tracking, creating differentiated competitiveness.

However, the seemingly blue ocean of index funds presents a real dilemma for Invesco Great Wall.

First, competition in the index fund space has become fierce, with head effects very prominent. Leading firms like China Asset Management, E Fund, Huatai-PineBridge, Southern, and Guotai Junan have already established first-mover advantages, forming scale and brand barriers in core areas like broad-based and sector ETFs. Especially in broad-based ETFs, top firms’ products often reach hundreds of billions or over a trillion yuan, while Invesco Great Wall’s index products are generally smaller and less competitive.

Second, the company lacks core competitive advantages and differentiation in index funds. Its product layout is scattered, without flagship products or iconic ETFs, making it hard to build market influence. In innovative areas like index enhancement and Smart Beta, performance has been mediocre, with limited ability to generate excess returns and attract long-term capital.

More critically, Invesco Great Wall’s strategic shift in index funds lacks systemic planning and continuity. Its investments in this area are more reactive—responding to the challenges in active equity—rather than proactive strategic upgrades. Resources remain concentrated in active management, with relatively weak research, marketing, and channel resources in the index fund segment, making it hard to compete with top-tier public fund managers.

Furthermore, the profit model of index funds differs fundamentally from active management. Active funds rely on management fees and performance-based rewards, while index funds mainly earn through scale. This means that to succeed in index funds, Invesco Great Wall needs to invest heavily in expanding scale, which is unlikely to be profitable in the short term—posing a significant challenge given the current performance pressures.

Conclusion: The Pain of Transformation for an Old Public Fund and Future Paths

Invesco Great Wall’s predicament reflects the broader pain points of many veteran public fund managers overly reliant on the “star fund manager” model. In a market where styles shift rapidly and competition intensifies, overdependence on a single star, a single style, or a single track is no longer sustainable.

For Invesco Great Wall, the current task is not simply shifting to index funds but undertaking a deep strategic overhaul: first, overcoming “star dependency syndrome” by building a platform-based, diversified research system and cultivating a team of tiered fund managers; second, strengthening core research capabilities across value, growth, tech, and new energy sectors to better adapt to market style changes; third, rationally developing index funds, focusing on core sectors, creating flagship products, and establishing differentiated competitiveness; and fourth, accelerating digital and intelligent transformation to improve research efficiency and client service.

The competition in the public fund industry has shifted from “star battles” to “platform battles” and “capability battles.” For veteran institutions like Invesco Great Wall, only by facing the pain of transformation head-on, breaking path dependence, can they find their place again amid industry upheaval. Otherwise, the once “equity benchmark” may gradually be marginalized in the tide of the times.

Author’s note: These are personal opinions and for reference only.