Summary of Key Points
This year, the performance of newly established active equity funds (especially those labeled with “technology”) has varied dramatically: over 60% have suffered losses, while the best fund has earned a 58% return, and the worst has lost nearly 40%, representing a difference of over 97% between the top and bottom performers. Some funds have even reduced in value to around 60% of their initial net asset value (0.6 yuan) just two months after inception. The key factor behind this lies in the timing and direction of the fund managers’ stock purchases—those who started buying early and focused on the technology sector have reaped substantial profits, whereas those who bought at high prices or chose the wrong direction have suffered heavy losses. Given the current market volatility, it is expected that investment styles will alternate between technology growth and dividend-oriented values in the future. It is recommended to avoid crowded sectors and instead focus on industries with solid underlying logic.
How Extreme Is the Performance Gap Among New Funds?
Let the numbers speak: As of August 19th, out of the 280 newly established active equity funds this year, only 109 have been profitable (less than 40%).
- Best Performers: Ping An Semiconductor Leading Selection A (launched in January) earned a 58%, and Rongtong Technology Elite Selection A (launched in February) earned a 52.87%, both by capitalizing on the upward momentum in the technology sector during the first half of the year.
- Worst Performers: Shanghai Yin Technology Pioneer A (launched in January) lost nearly 40%, and Guotai Haitong New Energy Smart Selection A (launched in June) lost 35.54% in just two months, with its net asset value dropping to 0.64 yuan.
- Contrast: Funds with the same “technology” label and similar launch dates can have returns that differ by nearly 100 percentage points due to differences in the stocks they purchased and the pace of their investments—this means that for an investment of 100,000 yuan, some investors might make a profit of 58,000 yuan, while others could lose 40,000 yuan.
Why Do Some Funds Perform Well While Others Suffer Heavy Losses?
The main reasons are the timing and direction of their stock purchases:
- Successful Funds: Those established in January or February (before the market began to rise) quickly built positions in technology stocks (such as semiconductors and AI), thus benefiting from the sector’s growth during the first half of the year.
- Failed Funds can be categorized into two types:
1. Wrong Direction: For example, Shanghai Yin Technology Pioneer A bought media stocks in the first quarter (which did not perform well) and then followed up with investments in electronics and communications stocks in the second quarter, just as the technology sector began to decline in July. With nearly 90% of its assets invested in these stocks, the fund suffered significant losses.
2. Bad Timing: Guotai Haitong New Energy Smart Selection A was launched at the peak of the technology market in June and reached full investment capacity within two weeks, focusing on lithium battery and solid-state battery stocks that had seen a 217% increase earlier in the year. When the sector corrected in July, these stocks fell by an average of 45%, resulting in substantial losses for the fund.
Why Is the Timing of Stock Purchases So Important?
The period for building a stock portfolio is the “window of opportunity” for fund managers (regulations allow this to be completed within six months), but in practice, most funds complete it within 1-3 months. Different timing strategies lead to vastly different outcomes:
- Fast Investing: If the direction is correct (such as during an upward market), quick investment can lead to substantial profits; however, if the direction is wrong or the market turns down, losses can be severe (new funds, lacking past performance records, have less cushion against losses).
- Slow Investing: Although this may result in missing short-term gains, it allows for a more cautious approach and avoids buying stocks at high prices, thus reducing risk.
For instance, the Guotai fund reached full investment capacity immediately after its launch, catching the market’s downturn, whereas the Ping An Semiconductor fund gradually built its position over time and then benefited from the technology sector’s rise.
What Should Investors Do in the Current Volatile Market?
Experts suggest the following:
- Technology Sector Rebound: This is not a “turnaround” but rather a recovery from previous declines. Further gains will depend on actual performance (e.g., whether AI companies have real orders and can generate revenue).
- Balanced Future Trends: The market is unlikely to focus solely on technology; dividend-paying assets (such as coal and petrochemicals, which offer stable cash flows) may see opportunities in the second half of the year. There will be a rotation among technology, consumer, and financial real estate sectors.
- Advice for Ordinary Investors:
1. Avoid chasing “hot sectors” (e.g., AI hardware, which have risen excessively earlier in the year), as these can be volatile.
2. Buy into sectors with solid industrial foundations during market corrections, such as technology stocks with clear business models or high-dividend stocks.
3. Be cautious when purchasing new funds; consider the fund manager’s investment style (whether aggressive or conservative) and avoid products launched at market peaks.
In One Sentence
Investing in new funds is not about making a blind decision. You need to consider the timing of their establishment, the fund manager’s investment strategy, and whether the stocks they hold are truly valuable. In a volatile market, “getting the timing right” is far more important than “betting on a particular sector.”