"Doubling Funds" and "Loss-Making Accounts" Coexist: The First Batch of New Variable Fee Rate Funds Competition is Coming

Securities Times reporter Shen Shuhong

At the end of May 2025, the first batch of 26 new floating-rate funds was launched simultaneously, officially marking the beginning of a new chapter in public fund rate reform. Now, less than a year into operation, this group of products has shown significant performance differentiation.

On one side are the “aggressive” funds that actively embrace market trends, heavily investing in popular sectors like AI, with some products doubling their net value and standing out; on the other side are the “conservative” funds that stick to traditional sectors such as finance, consumption, and real estate, which have lagged in this phase of the market, with some products still at a loss since inception. The performance gap between the best and worst products has exceeded 103 percentage points.

According to the rules, these products must use performance benchmarks as the core of their evaluation. Data shows that among the first batch of 26 products, currently 14 have outperformed the benchmark, but at the same time, 10 have lagged the benchmark by more than 3 percentage points. According to regulations, if the performance does not meet standards after one year of operation, the management will implement a discounted fee rate of 0.60%, benefiting investors. With only three months left until the first fee rate evaluation, whether these products can maintain the standard fee rate based on their performance or fall into the discounted rate category has become a focal point of market attention.

The first new floating-rate “doubling base” emerges

In 2025, the first batch of new floating-rate funds became a competitive arena for various fund companies to showcase their investment research capabilities. However, less than a year into operation, this group of competing products has shown significant performance differentiation, with the return gap widening to 103.71 percentage points.

As of March 6, among the first batch of 26 products, 23 have achieved positive returns, with 6 reporting returns exceeding 30%. Notably, the Huashang Zhiyuan Return Fund, managed by Zhang Mingxin, has achieved a cumulative return of 101.43% since its inception, becoming the first product in this batch to double its net value, leading the second place by more than 27 percentage points.

During the same period, the performance of the Jiashi Growth Win-Win Fund, managed by Li Tao, and the Xinao Advantage Industry Fund, managed by Wu Qingyu, has also been impressive, with returns of 74.00% and 60.28%, respectively. Other products, such as the Yifangda Growth Aggressive Fund managed by Liu Jianwei, the Dacheng Zhizhen Return Fund managed by Du Cong, and the ICBC Credit Suisse Fund managed by Guo Xuesong, have also reported returns exceeding 30% since inception.

From the holding styles, the outstanding floating-rate funds in this batch have mostly heavily invested in the AI sector. For instance, the Huashang Zhiyuan Return Fund has continuously focused on core targets such as Zhongji Xuchuang, Xinyi Sheng, and Shenghong Technology since the second half of last year. Although discussions about the “AI infrastructure bubble” are rampant, the fund manager Zhang Mingxin believes that the sustainability and predictability of the capital expenditures of major overseas companies are beginning to diverge after extensive research and close evaluation. Therefore, he increased allocations to Google’s related supply chain targets in the fourth quarter of last year, as well as to the segmented technology earnings direction under the scale-up trend, and participated in more growth fields such as storage and power energy storage related to the AI industry’s prosperity diffusion.

The Jiashi Growth Win-Win and Xinao Advantage Industry funds also focus on leading segments that have medium to long-term growth potential, such as AI computing power, AI applications, and domestic industrial upgrades. The fund manager of Xinao Advantage Industry, Wu Qingyu, stated in the fourth quarterly report last year: “The prosperity of overseas AI server-related computing power remains high, and the performance of related companies is expected to continue to be strong. At the same time, domestic computing power, new AI hardware, and downstream applications are also expected to see sustained demand release.”

Some products are still at a loss

While some floating-rate funds are leading in performance, significant differentiation exists within this sector. Some products heavily invested in consumption, finance, and real estate sectors have underperformed, even showing stage losses.

As of March 6, the Anxin Value Win-Win, Ping An Value Enjoyment, and Penghua Win-Win Future funds have all been at a loss since inception, with net value growth rates of -2.28%, -1.16%, and -1.03%, respectively. Additionally, the Southern Rui Xiang, Huaxia Rui Xiang Return, and Manulife Smart Navigation funds have also seen net value growth rates below 10% since inception, showing relatively flat performance.

The mismatch between holding styles and the stage market style is the core reason for the performance pressure on these funds. Taking the Anxin Value Win-Win fund as an example, its heavy stock holdings in the fourth quarter of last year were mostly in consumption, finance, and real estate stocks such as Stone Technology, China Resources Land, China Pacific Insurance, and China Construction Bank, and it did not participate in market hotspots. The fund manager Yuan Wei candidly stated in the fourth quarterly report that the direction of increased holdings primarily focused on the domestic demand market. “Although it performed very much against the wind in the short term, underperforming the market overall significantly, we are confident about the future performance of the portfolio based on our confidence in China’s long-term domestic demand fundamentals and trust in the law of value.”

Ping An Value Enjoyment also insists on a contrarian value style, focusing on individual stocks in the home appliance, liquor, and internet sectors. The fund manager of this product stated that in an environment of significantly improved liquidity and elevated market sentiment, although thematic rotation is active, this is not the investment approach they excel at. Meanwhile, a group of companies with stable profits and high dividend yields have received less attention due to their lack of short-term upward trends, while their long-term allocation value is becoming increasingly prominent.

Exceeding benchmarks is challenging; long-term effects remain to be seen

Since 2025, although the overall market has warmed, and most fund products have achieved positive returns, consistently outperforming performance benchmarks remains challenging. Wind data shows that among the first batch of 26 floating-rate funds, only 14 products have outperformed the performance benchmark since inception, accounting for 53.85%, which means nearly half of the products have not met the standards.

Specifically, the Huashang Zhiyuan Return Fund has performed exceptionally well, outperforming the performance benchmark by 85.13 percentage points. Additionally, the Xinao Advantage Industry, Jiashi Growth Win-Win, and ICBC Hongyu Return funds have also outperformed the benchmark by 46.61, 38.24, and 20.02 percentage points, respectively.

However, the Ping An Value Enjoyment fund has underperformed the performance benchmark by 16.21 percentage points since inception, while the Anxin Value Win-Win, Penghua Win-Win Future, Huaxia Rui Xiang Return, and Yin Hua Growth Smart Select funds have also underperformed the performance benchmark by more than 10 percentage points. Among them, there are products that have exceeded 10% or even 20% returns since inception but still underperformed the benchmark.

According to public information, this batch of new floating-rate funds uniformly sets management fees at three tiers: 1.2%, 1.5%, and 0.6%. If investors redeem their holdings within one year, a base fee rate of 1.2% per annum will be charged; if held for one year or more, and the annualized return exceeds the benchmark by more than 6 percentage points with a positive return, a management fee of 1.5% per annum will be charged; if the annualized return lags the benchmark by 3 percentage points or more, a management fee of 0.6% per annum will be charged; in other cases, a management fee at the rate of 1.2% per annum will be confirmed.

Currently, there are still 10 products from the first batch of new floating-rate funds that have lagged the benchmark by more than 3 percentage points since inception. Under the floating-rate mechanism, if these products still perform poorly after one year of operation, the management will implement a 0.60% annual fee rate, effectively benefiting investors.

A market insider from a large public fund in North China reminds that this batch of products has not been running for long, and it is advisable for investors to be a bit more patient; the ultimate results will depend on the long-term real gains of investors. “The original design of floating-rate funds is to stimulate fund managers’ pursuit of excess returns while protecting investors’ rights through fee discounts in poor performance scenarios.”

Some industry insiders believe that if floating-rate funds consistently underperform the benchmark in the long term, the product management fee income will be significantly reduced. This high operational threshold and high research requirements pose a solid challenge to the overall strength of fund companies.

(Editor: Wen Jing)

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                                                            Funds