Public Fund 2025 Annual Report Disclosure: Which Directions Are Fund Managers Focusing On?

Ask AI · How will AI technology drive a structural bull market in A-shares?

China Securities Fund and China Post Fund were the first to disclose their latest annual reports. Fund managers generally remain optimistic about AI and technology sectors, believing that A-shares will shift from “valuation repair” to “profit-driven growth,” with abundant structural opportunities. At the same time, they warn that the difficulty of extracting excess returns is increasing, and risks related to geopolitical tensions and supply chain fluctuations should still be watched carefully.

On March 25, multiple funds under China Securities Fund disclosed their 2025 annual reports. Previously, China Post Fund also released the annual reports of several of its funds.

According to the disclosed reports, fund managers continue to favor AI (artificial intelligence) and other tech sectors. However, some managers note that the difficulty of achieving excess returns is rising, and geopolitical risks and supply chain restructuring could keep market volatility high.

Overall, fund managers are optimistic about the A-share market, believing it is full of structural opportunities and expect the market to shift from “valuation repair” to “profit-driven growth.”

Abundant Structural Opportunities

As of March 25, China Securities Fund and China Post Fund have disclosed some of their 2025 annual reports. Looking ahead to 2026 macroeconomics, several fund managers believe there are many investment opportunities.

Bai Peng, manager of China Post Future Blue Chip Fund, stated in the annual report that overseas inflation pressures are expected to ease, but the lagging impact of high interest rates on investments still needs attention. Geopolitical risks and supply chain restructuring may also keep market volatility high.

Meanwhile, Bai Peng believes that as China enters the “14th Five-Year Plan” new chapter, policy focus will shift to domestic demand recovery and the transformation of old and new growth drivers. Therefore, in the medium to long term, he expects A-shares to move from “valuation repair” to “profit-driven growth,” with ample market liquidity and abundant structural opportunities.

Jiang Liuwei, manager of China Post Ruixiang Two-Year Open Fund, thinks that the conditions for a continued slow bull market in 2026 remain unchanged. However, all mid-term strong logic sectors have already played out to some extent. In the first half of the year, investors should prepare for rapid market sentiment releases and optimistic pricing expectations; at the same time, research should be conducted proactively to monitor whether, in the second half, the market will shift styles based on structural changes in profit expectations and valuation reversion, potentially leading to a phase of cyclical gains in bottom-positioned, pro-cyclical stocks.

“But a risk to watch is inflation, especially fluctuations in crude oil prices,” Jiang Liuwei said. If the delayed impact of U.S. tariffs and oil price fluctuations resonate, it could lead to uncontrollable inflation and passive tightening of liquidity expectations.

Chen Liang, manager of China Post Fund’s Equity Market, expressed optimism about China’s long-term bull market in the annual report.

AI Still a Focus of Attention

AI remains a key focus for fund managers in their annual reports.

“Under the continued policy guidance of ‘new quality productivity,’ the economic structural transformation has entered a deep-water zone. Although the overall economy may show a mild recovery, the characteristics of high-quality development will become more prominent,” said Shen Luyao, manager of China Post Advanced Manufacturing Fund. Regarding the securities market, he believes that in 2026, with marginal easing of liquidity, risk appetite could improve. “We believe that excess returns will emerge from the deep integration of AI and high-end manufacturing sectors, leading to a structural bull market driven by technological revolution in A-shares.”

Shen Luyao also stated that in 2026, he will continue to maintain a high allocation in the humanoid robot and embodied intelligence industry chain, avoiding inefficient timing, and instead seek excess returns through deep industry chain exploration.

Liu Sheng, manager of China Securities Value Leadership Fund, said that the wave of AI industry development remains vigorous, and they are closely monitoring its impact across various sectors. Trillions of dollars of investment will bring many opportunities, whether in internet platforms, hardware companies, or upstream support.

Liu Sheng emphasized that they will combine valuation, fundamentals, and industry trends to dynamically adjust their exposure. From the demand side, he favors tech stocks with strong growth potential, such as new energy and AI.

Optimism About Certain Consumer Sectors

Consumer sectors, after long-term adjustments, still attract fund managers’ attention.

In the view of Xiong Zhenghuan, manager of China Securities Value Quality One-Year Holding Fund, all business activities ultimately revolve around consumption—whether physical or service consumption, in tech or traditional industries. All production activities should consider how to complete the consumer purchase cycle. He states in the annual report that China’s consumer goods industry, in terms of business models, cycle position, and long-term global potential, is currently in a phase of high-quality assets being sold at attractive prices.

Xiong Zhenghuan believes that under the continuous iteration of AI, offline scenarios—with their diverse and tangible attributes—possess strong anti-fragile properties and will have unique value. Future offline consumption will benefit from increased leisure time and diversified consumption scenarios. He plans to intensify research on offline consumption and observe opportunities in urban renewal-related real estate operations.

Qu Zheng, manager of China Post Consumption Upgrade Fund, noted that the consumer sector is unlikely to see broad-based gains, but rather more structural opportunities. He highlights that the future of new consumption industries will be the main growth engine. He points out that, in the current year, sectors with a more pro-cyclical nature—such as upstream petrochemicals, agriculture, and food & beverages—may present investment opportunities once their cycles turn, especially as some industries have cleared excess capacity over the years and inventories have returned to reasonable levels, indicating potential cyclical turning points.

Seeking Cheap Assets

Chen Tao, manager of China Securities Value Pioneer Fund, stated in the annual report that the fund adheres to a low-valuation, value-growth investment strategy.

However, the current market is more focused on high-growth, high-activity sectors. Chen Tao notes that it is difficult to simultaneously pursue low valuation, high activity, and high quality. He suggests that investors should sometimes abandon short-term cyclical preferences, focusing instead on long-term variables like growth potential, corporate competitiveness, and business models. During downturns or at the bottom of the cycle, contrarian stock picking can help buy good companies cheaply and patiently wait for a cyclical rebound, potentially leading to double returns during growth phases. Ideally, some stocks could shift from value to growth, increasing price elasticity.

Chen Tao believes that valuation gaps after profit cycle adjustments are mainly concentrated in real estate and related industries, consumer sectors, domestic pharmaceuticals, and some midstream manufacturing—areas suppressed by pricing factors. “We will focus on these areas to find investment opportunities.”

Similarly, Liu Sheng, also employing a low-valuation, value-investing approach, notes that the AI and resource commodities sectors continue to perform well this year. While he remains optimistic about industry trends, considering valuation, market attention, and trading activity, he acknowledges that finding alpha is becoming more challenging. He states he will not solely stick to currently hot sectors but will seek opportunities within his investment framework. Overall, he sees increasing difficulty in extracting alpha.

Reporter: Xia Yuechao

Editor: Chen Cai