Performance of emerging funds shows extreme divergence, with the "Light Chaser" achieving returns that more than double.

Recently, the performance of new funds established within the past year has shown significant divergence. Technology-themed funds represented by artificial intelligence (AI), optical modules, and semiconductors have become “top students,” especially those heavily invested in optical module concepts, which have doubled or more in just a few months. In contrast, some new funds focusing on traditional industries or concentrated on Hong Kong internet giants have performed poorly, with net values experiencing noticeable declines. This clear differentiation behind this is the extreme focus of fund managers on the tech mainline. However, high concentration holdings that drive performance also sow the seeds for high volatility.

Taking Huashang Zhiyuan Return C as an example, as of April 24, this fund has achieved a return of 174.74% since its establishment in mid-July last year, more than doubling in nine months. Similarly, the Focused on Industrial Upgrades C, which also concentrates on technology, has achieved an impressive increase of 145.21%, with its top holding being XinEasy, and its tenth-largest holding being Changxin Bosheng.

From a holdings perspective, successful new funds generally have heavy positions in the optical module industry chain, becoming true “light chasers.” The first quarter report shows that Huashang Zhiyuan Return C’s top ten holdings are highly concentrated, with XinEasy and Changfei Fiber Optic Cables being the first and second largest holdings, accounting for 0.143% and 0.42% of circulating shares, respectively; leading optical communication industry chain giants such as Zhongji Xuchuang, Tianfu Communications, and Hengtong Optoelectronics also hold significant positions, indicating the fund manager’s clear optimism for optical modules and printed circuit boards (PCBs).

Additionally, the performance of related ETF products has also been outstanding. As of April 24, the ChiNext AI ETF (Southern) and the ChiNext AI ETF (Fuguo) have since inception returns of 170.48% and 138.46%, respectively. Both products were launched in April and July 2025, with highly similar holdings, with XinEasy and Zhongji Xuchuang as their top two holdings, each constituting 15.29% and 15.26% of net assets. Moreover, stocks like Yuanjie Technology, Changchuan Technology, and Wangsu Technology, which are part of the AI and semiconductor industry chains, also occupy important positions.

Regarding the sources of performance, Pan Shuiyang, a fund manager at Southern Fund, stated in the first quarter report that under the dual drive of overseas capital expenditure exceeding expectations and domestic policy catalysts, the optical module industry will continue to benefit from rate iteration and demand explosion; meanwhile, AI applications are accelerating commercialization, with vertical scene penetration speeding up, and the expansion of model consumption driven by Agent scale will continuously inject growth momentum into applications. The ChiNext AI Index focuses on the AI industry chain, covering upstream hardware such as optical modules and downstream AI applications, enabling precise grasp of hardware benefits from volume growth and tight computing power, as well as capturing growth opportunities from AI commercialization.

In stark contrast, some new funds that hold high-growth stocks with high prosperity or deviate from the main line have performed poorly, even incurring significant losses. For example, Rongtong Quality Selection C, heavily invested in tourism and consumer concepts, has a return of -16.93% since inception, while Qianhai Open Source Shanghai-Hong Kong Deep Leading Selection C has a return of -20.70%. Additionally, some Hong Kong Stock Connect-related products also underperform, with Tianhong CSI Hong Kong Stock Connect Technology ETF ©, Hang Seng Technology ETF (Tianhong), and Southern CSI Hong Kong Stock Connect Internet ETF all having returns between -24% and -27%, ranking at the bottom.

By examining holdings, it can be seen that the Hong Kong Stock Connect funds with poor performance have their top ten holdings highly concentrated in Hong Kong internet giants. For example, in the first quarter, the top holding of the Southern Hong Kong Stock Connect Internet ETF was Tencent Holdings, accounting for 15.29% of net assets; the second was Alibaba-W at 14.78%; and the third was Xiaomi Group-W at 13.86%. Other top holdings include Meituan-W, Kuaishou-W, and Kingdee International.

The Hang Seng Tech ETF (Tianhong) held a more diversified portfolio in the first quarter. Its top holding was BYD, accounting for 9.20% of net assets; the second was Meituan-W at 9.08%. The top ten holdings also included Xiaomi Group-W, Tencent Holdings, Semiconductor Manufacturing International Corporation (SMIC), JD.com-SW, Kuaishou-W, Baidu Group-SW, involving new energy vehicles, internet, semiconductors, and other sectors.

As an ETF linkage fund, Tianhong CSI Hong Kong Stock Connect Technology ETF © holds smaller direct stock positions, with its top ten holdings being Tencent Holdings, Alibaba-W, Xiaomi Group-W, Meituan-W, BYD, SMIC, BeiGene, Cinda Biotech, Kuaishou-W, and WuXi Biologics, all Hong Kong-listed tech and pharma leaders.

Although these funds’ holdings are industry leaders, since the overall adjustment of the Hong Kong market in Q4 2025 and valuation pressures on the internet sector, their net values have also experienced significant declines.

From an industry allocation perspective, the performance of new funds highlights the current A-share market trend centered around growth themes. On one hand, technology theme funds represented by AI, optical modules, and semiconductors generally recorded substantial gains, serving as the main drivers of new fund performance growth; on the other hand, due to valuation adjustments, Hong Kong Stock Connect products (especially those focused on internet and biotech sectors) faced pressure, somewhat dragging down overall fund performance. In comparison, traditional cyclicals like banks, real estate, and steel are generally underweighted, further emphasizing the overall bias toward tech growth in new funds.

A researcher from a public fund in South China commented that currently, new funds outperform older funds with longer histories. First, new funds entered the market during a period of structural opportunities, allowing fund managers to more flexibly seize market hotspots; second, their smaller scale makes rebalancing and stock switching more agile; third, new funds often focus on hot themes at launch, making them more attractive to capital.

However, the researcher also warned investors to beware of risks from concentrated holdings. Data shows that high-performing new funds often have highly concentrated positions—for example, a top-performing fund’s top ten holdings include over 60% in optical module industry chain stocks. While such high concentration can generate excess returns during market peaks, it also exposes the fund’s net value to significant fluctuations if the relevant sectors experience adjustments.