Fortis China Securities 500 Index Enhanced Annual Report Analysis: Class C Share Redemption Rate at 59%, Net Profit Surges by 303%

Key Financial Metrics: Net Profit Grows Sharply, Net Assets Slightly Decline

In 2025, the FuAnDa CSI 500 Index Enhanced Fund (hereinafter referred to as “the Fund”) Class A shares achieved net profit of 13,426,936.73 yuan, up 303.3% from 3,329,352.50 yuan in 2024; Class C shares achieved net profit of 417,565.64 yuan, turning from a loss to a profit compared with -626,335.19 yuan in 2024. Total net assets at the end of the period were 49,290,574.86 yuan, down 4,401,540.62 yuan from 53,692,115.48 yuan in 2024, a decline of 8.2%.

Net Value Performance: Class A Underperforms the Benchmark by 0.13%, Class C Underperforms by 0.52%

In 2025, the Fund’s Class A share net value growth rate was 28.68%, while the performance comparison benchmark return rate for the same period was 28.81%, resulting in an underperformance of 0.13 percentage points versus the benchmark; Class C share net value growth rate was 28.29%, underperforming the benchmark by 0.52 percentage points. Over the long term, since inception, Class A’s net value growth rate was 66.92%, benchmark was 50.53%, with excess return of 16.39 percentage points.

Investment Strategy and Operations: Mid-Year Strategy Iteration, Quantitative Model Upgrade

The report shows that in 2025, the A-share market featured prominent structural opportunities, with technological innovation and resource reconfiguration as the main themes. In the first half of the year, small-cap and growth factors performed strongly; from August to September, quantitative strategies experienced a systemic drawdown, followed by a recovery in the fourth quarter. Based on its assessment that market trading conditions had improved, the manager made important mid-year iterations to the index enhancement strategy, introducing portfolio construction using machine learning and deep learning models to adapt to market changes.

Fee Analysis: Management Fee Slightly Down, Trading Costs Significantly Reduced

Management Fee and Custody Fee

The fund management fee incurred during 2025 was 401,759.30 yuan, down 5.1% from 423,554.22 yuan in 2024; the custody fee was 80,351.82 yuan, down 5.1% from 84,710.87 yuan in 2024. The decrease in fees basically matches the reduction in fund size.

Trading Expenses

Trading expenses for 2025 for stock transactions were 522,982.29 yuan, down 31.2% from 759,850.21 yuan in 2024. This was mainly because the value of stock transactions increased by 8.5% (from 47.75 billion yuan to 51.78 billion yuan), but the commission rate declined.

Stock Investment Gains: Gains from Buy-Sell Price Spreads Up 523%

In 2025, among stock investment gains, gains from buy-sell price spreads on stock transactions were 11,457,175.21 yuan, up 523.4% from 1,837,898.71 yuan in 2024, becoming the core driver of net profit growth. Meanwhile, dividend income was 849,540.85 yuan, down 34.0% from 1,286,514.56 yuan in 2024.

Related-Party Transactions: Nanjing Securities Contributes 30% of the Transaction Value, Commission Share 100%

The Fund conducts stock trading through the trading desks of its related party, Nanjing Securities (the fund manager’s shareholder). In 2025, the transaction amount was 307,215,198.69 yuan, accounting for 30.25% of the total stock transaction value. Commission payable was 60,184.95 yuan, accounting for 100% of the total commission for the period; the commission rate was about 0.02%, which is broadly consistent with the market’s average level.

Stock Holdings: Manufacturing Accounts for Over 60%, Actively Investing with Focus on Tech Growth

Sector Allocation

In index investing, manufacturing accounts for 50.08% of the fund’s net asset value; the information transmission, software and information technology services industry accounts for 6.14%. In active investing, manufacturing accounts for 11.72%, and the information technology industry accounts for 0.92%. The combined share of the top three heavily weighted industries is 68.86%.

Top Ten Heavily Weighted Stocks (Index Investing)

Holder Profile: Institutions Hold Over 67% of Class A; Class C Faces Large Redemptions from Individual Investors

Changes in Fund Shares

Class A shares had 39,221,327.08 shares at the beginning of the period and 28,642,658.60 at the end of the period, with net redemptions of 10,578,668.48 shares and a redemption rate of 27.0%; Class C shares had 2,176,447.15 shares at the beginning of the period and 891,945.96 at the end of the period, with net redemptions of 1,284,501.19 shares and a redemption rate of 59.0%.

Holder Type

For Class A shares, institutional investors held 19,214,157.16 shares, accounting for 67.08%; individual investors held 9,428,501.44 shares, accounting for 32.92%. All of Class C shares are held by individual investors.

Manager Outlook: In 2026, a Profit-Driven Structural Market; Focus on Cyclically Responsive Sectors and Tech Growth

The manager believes that in 2026, external disruptions overseas will ease, and domestic policy will continue with “moderately accommodative” measures, supporting a mild economic recovery. Global capital is accelerating its shift toward high-growth tracks in Asia. The A-share market may enter a profit-driven structural market, with style switching from growth tracks to a balanced approach between cyclically responsive sectors and tech growth.

Risk Warning: Be Cautious of Fund-Size Contraction and Performance Volatility

2. Risk of Continued Fund-Size Contraction: Class A and Class C shares have experienced net redemptions for two consecutive years. Net assets at the end of the period are insufficient for 50 million yuan, approaching the liquidation threshold (a warning is required if net value falls below 50 million yuan for 20 consecutive working days). This may affect liquidity and strategy execution.
3. Underperformance vs. the Benchmark: In 2025, both Class A/Class C underperformed the benchmark; the effectiveness of the quantitative strategy iteration needs to be observed.
4. Risk of Concentrated Related-Party Transactions: With a 30% trading share via Nanjing Securities, attention is needed to fair trading practices and the reasonableness of commission.

Investment Opportunities: Quant Strategy Upgrade and a Window for Market Style Switching

2. Bonus from Strategy Iteration: Applying machine learning models may improve the ability to generate excess returns; long-term excess returns of 16.39% are compelling.
3. Allocations to Cyclically Responsive Sectors and Tech Growth: The manager favors cyclically responsive sectors (such as resources and manufacturing) and tech growth areas (semiconductors, AI). These are aligned with the structural composition of constituent stocks of the CSI 500 Index, and may form a resonance effect.

(Data source: FuAnDa CSI 500 Index Enhanced Securities Investment Fund 2025 Annual Report)

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