Top Funds Easily Sprint to Year-End with Ease

Recently, reporters have discovered that several public fund organizations have frequently issued announcements to suspend large-scale subscriptions for their actively managed equity products. This notably includes high-performing funds managed by renowned fund managers such as Zhu Shaoxing of Fortune SG Fund, Zhou Haidong of Huashang Fund, and Wang Jian of China Universal Fund.

Industry insiders believe that the market is gradually entering a stage of differentiation as the year-end approaches, with sector rotations accelerating. Fund managers' decision to restrict subscriptions at this time may be motivated by a desire for greater stability in the capital front, aimed at maintaining the overall stability of fund portfolio operations and returns.

Adjusting the limits on large subscriptions.

On November 26, Qianhai Kaiyuan Fund announced that it would adjust the limits on large subscriptions, regular investment, and conversion transfer business for non-individual investors in the multi-strategy hybrid fund managed by fund manager Ye Jia. The maximum cumulative subscription amount (including regular investment and conversion transfer) per fund account per day was adjusted from the original 2 million yuan (calculated across various share classes) to 100,000 yuan.

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On November 25, ICBC Credit Suisse Fund announced that, starting from November 27, the fund managed by Yang Xinxin would limit large subscriptions, conversion transfer, and regular investment amounts to 1 million yuan for institutional investors.

On November 21, China Universal Fund announced that starting from November 21, the subscription, conversion transfer, and regular investment amounts for the fund managed by Wang Jian would be restricted, with a limit of 1 million yuan for any single or cumulative subscription, conversion transfer, or regular investment amount per fund account per day.

On November 20, Huashang Fund announced that the fund managed by Zhou Haidong would suspend single or cumulative large-scale subscriptions, large regular investments, and large conversion transfers exceeding 100,000 yuan (excluding 100,000 yuan) per fund account for institutional clients in a single day.

On November 20, Fortune SG Fund announced that the A and C shares of the Tianhui Growth Mixed Fund (LOF) managed by Zhu Shaoxing would limit subscription, regular investment, and conversion transfer applications exceeding 20,000 yuan (excluding 20,000 yuan) starting from January 28, 2022, and decided to further include the D share of the fund in the subscription restriction from November 20.

On November 19, Guotou Ruijin Fund announced that the mixed fund managed by Ji Li would suspend large subscriptions (including conversion transfers and regular investments) from November 20 to December 12, with a limit of 500,000 yuan for each fund account on each trading day for subscriptions, conversion transfers, and regular investments cumulatively.

Maintaining portfolio and return stability.

Industry analysts suggest that the restrictions on subscriptions after a rise in net asset value are largely driven by the need to protect performance. "When a fund's net asset value is at a relatively high level, a large influx of new capital can dilute the fund's returns, and when the market is relatively high, it becomes challenging for fund managers to find suitable investment targets quickly after a significant amount of capital flows in," an analyst pointed out. "As November progresses, market trends are gradually differentiating, and sector rotation is accelerating. High-performing fund managers may choose to limit subscriptions in hopes of achieving more stability in capital." The analyst noted that approaching year-end, limiting subscriptions for high-performing products is conducive to maintaining the stability of fund portfolio operations and returns.

In terms of performance, many of the products mentioned above have delivered solid returns this year. According to Choice data, for instance, the fund managed by Yang Xinxin, ICBC Select Balanced Hybrid, achieved an annual return rate of 9.52% as of November 25, ranking in the top 25% of its category; the Hybrid Advantage Industry Fund managed by Zhou Haidong had an annual yield of 8.42%, also placing it in the top 25% of its category.

Some industry insiders also indicated that to control product scales and avoid rapid expansion in a short period, many actively managed funds often opt to limit their scales. They noted that subscription restrictions help mitigate the issue of funds being "too large to pivot," while also curbing arbitrage behavior by investors buying individual stocks through funds during trading suspensions, thus protecting the interests of original fund shareholders.

Marginal improvement in the capital front.

As the year-end approaches, several public fund organizations have convened annual investment strategy meetings for 2025 to share their market outlook.

Looking ahead, Zhou Xuejun from Hai Fudong Fund stated at the 2025 investment strategy meeting that the short-term downside risks in the market are limited, and active operations can currently be undertaken. This is mainly based on four reasons: first, policy measures are actively supporting the market, including the decision-making level's commitment to boost the capital market, and the People's Bank of China's newly established tools to support capital inflow; second, there is a marginal improvement in capital availability, with substantial inflows into broad-based ETFs, and stable inflow from insurance funds, all supporting the market; third, market risk appetite is rising, making it unlikely for previously excessive undervaluation to recur; fourth, under various policy stimuli, market expectations suggest that the fundamentals of the economy are poised for sustained recovery.

According to Zhu Yun, director of the FOF investment department at Hai Fudong Fund, positive economic factors are gradually accumulating, with monetary and fiscal policies continuing to be enacted, and significant signs of economic stabilization emerging. Furthermore, the decision-making level places high importance on the capital market, guiding long-term capital flows, thereby improving the micro capital landscape. Overall, the likelihood of further market adjustments is low.

Regarding optimistic investment directions, Huang Zihan, a senior strategy analyst at Tianhong Fund, expressed, "We are optimistic about investment pathways that can restore high growth next year, such as power equipment, basic chemicals, and machinery. This is mainly because these industries are closely related to new infrastructure, and they align with the past investment habits of public fund organizations. We aim to identify products that can achieve excess returns within the realm of long-term high growth performance."