Rejecting customers on one hand, welcoming customers on the other? Money market funds and bond funds "close doors" to prevent arbitrage. New fund launches showcase a "battle for market share."

The fund market generally enters “holiday mode” before the Spring Festival, with many funds announcing suspensions of related services during the holiday. However, the new fund issuance market remains enthusiastic. Data analysis shows that, according to published fund issuance plans, there were a total of 74 newly issued funds from February 1 to 13 before the holiday, and on the first trading day after the holiday, 24 new funds were launched simultaneously.

Contrasts in the Fund Market Before the Holiday

On February 12, Eastern Red Money Market Fund announced adjustments to large purchase limits and suspended direct sales agency transfer-in services. Specifically, the maximum daily purchase amount for fund A and B shares through distribution agencies, and for D, E, and F shares by non-individual investors, shall not exceed 100 yuan per fund account.

Meanwhile, several public fund managers such as Fubonda Fund, Southern Fund, Shenwan Lingxin Fund, Yongying Fund, and Great Wall Fund also issued similar notices before the holiday, suspending some fund products from subscriptions, transfer-ins, and regular fixed investments. These suspended products mainly include money market funds and bond funds, with some funds scheduled to resume operations on February 24.

Industry insiders say that the “closed-door” approach for money market and bond fund products by these institutions mainly aims to prevent large inflows of capital from diluting holiday returns. Most fund products’ purchase restrictions align with the stock exchanges’ holiday schedules during the Spring Festival. The three major exchanges will close on February 14 (Saturday) for the weekend, and from February 15 (Sunday) to February 23 (Monday) for the Spring Festival holiday. Normal trading resumes on February 24 (Tuesday).

In contrast to the pre-holiday adjustments for money market and bond funds, the new fund issuance market experienced a “wave of launches.” According to the new fund issuance calendar, on the last trading day before the holiday, six funds—such as Dacheng Zhaoxiang Hui Zhi Hybrid A, Dacheng Zhaoxiang Hui Zhi Hybrid C, Caitong CSI A500 Index A, Caitong CSI A500 Index C, Yongying Yuanjia Balanced Multi-Asset 90-Day Holding Hybrid (FOF) A, and Yongying Yuanjia Balanced Multi-Asset 90-Day Holding Hybrid (FOF) C—were officially launched.

Data shows that, based on subscription start dates and different share classes (same below), in January this year, 300 funds issued a total of 1,193.98 billion units, an increase of 165 funds compared to the same period last year, up 122.22%. The issued units increased by 33.864 billion, a 39.59% rise. Among them, 35 funds, including Wanjia Qitai Stable Three-Month Holding Hybrid (FOF) A, adopted a “one-day fundraising” model.

In February, the launch of new funds remained hot. From February 1 to 13, 74 new funds issued a total of 814.59 billion units, with 10 funds such as China Merchants Yu Tian Hybrid Initiating A choosing the “one-day fundraising” method. During the first trading week after the market reopened, according to announced plans, 48 new funds are scheduled to be issued, including Wanjia Medical Innovation Hybrid Initiating A and C, which also adopt the “one-day fundraising” approach.

Positive Expectations Fuel New Fund Launches

In terms of product types, among the 122 funds launched before and after the Spring Festival, stocks, hybrids, FOFs, and bonds each hold a significant share. Specifically, stock funds performed most prominently in February, with 40 funds issued, accounting for 32.79%. The number of hybrid funds, FOFs, and bond funds issued were 37, 23, and 22 respectively.

Of the 40 stock funds launched, passive index funds dominated with 30 offerings, while regular stock funds and enhanced index funds accounted for 6 and 4 respectively. Among 37 hybrid funds, equity-biased hybrids remained dominant with 33 issues, while bond-biased and flexible allocation hybrids had 2 each.

Regarding subscription scale, as of February 13, 45 funds had completed fundraising in February. Nine funds raised over 1 billion units, with the highest being Bo Dao Xing Hang Hybrid, which raised 2.733 billion units in 7 days. Six funds, including GF Yufeng Multi-Asset Stable Three-Month Holding Hybrid (FOF) C, Southern Wengjia Multi-Asset Allocation Three-Month Holding Hybrid (FOF) A, and Invesco Great Wall Yingjing Conservative Allocation Three-Month Holding Hybrid (FOF) A, adopted the “one-day fundraising” model.

Which institutions are racing to launch new funds? The data shows that among the fund management companies managing newly issued funds before and after the holiday, 19 firms have raised over 1 billion units. Many leading public fund managers are on this list, including GF Fund, E Fund, Southern Fund, and Guo Fund. Notably, GF Fund, which issued the most new funds, launched nine.

Will the “wave of new fund launches” continue? Under the influence of a sustained stock market recovery and other factors, funds have become a key battleground for capital. Industry insiders believe that the trend of a strong start for new fund issuance this year is clear, with both the number of funds and the total amount raised reaching new highs. The accelerated pace of fund company deployments also reflects positive expectations for the new year’s market.

Yang Delong, Chief Economist at Qianhai Open Source Fund, told reporters that the spring rally has gradually begun. During the Spring Festival, as people visit friends and family, the hot topic on the dinner table is undoubtedly last year’s investment returns. This will further spread the market’s profit-making effect, attracting more capital through direct account opening or fund purchases.

According to Zhu Renmu, an analyst at Guolian Minsheng, this year may focus on technology and consumer funds. The tech industry is a key development area encouraged by national policies, with rapid growth in artificial intelligence globally, offering significant industry development potential. Tech funds are expected to perform well through 2025, and due to their profit-making potential, they may continue to attract capital inflows. The consumer sector currently has relatively low valuations, and boosting consumption is a major national strategy, with future growth expected to recover.

(Edited by: Xu Nannan)

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