Public funds will significantly increase their allocation of A-shares assets by 2025.

Public mutual fund product annual report disclosures for 2025 wrap up, revealing the asset allocation structure.

Benefiting from the steady development of China’s capital markets in 2025, the net asset values of mutual fund assets continued to rise. The data show that, as of the end of 2025, mutual funds held stock market values of 9.03 trillion yuan. Compared with 6.77 trillion yuan at the end of 2024, this increased by 2.26 trillion yuan, a growth rate of 33.38%. Among them, equity funds showed a clearly improved trend in allocating A-share assets, rising from 5.89 trillion yuan at the end of 2024 to 7.48 trillion yuan at the end of 2025, an increase of 26.99%. The further increase in mutual funds’ allocation size to A-share assets reflects growing confidence in valuation recovery in China’s capital markets.

In terms of bond funds, the data show that, as of the end of 2025, the total market value of bonds held by mutual funds amounted to 21.11 trillion yuan, accounting for 53.44% of total assets. Compared with 18.87 trillion yuan at the end of 2024, it increased by 2.24 trillion yuan, a growth rate of 11.87%. The increased allocation to bond assets reflects that, in an environment where interest rates are trending downward and market risk appetite is converging, the role of bond assets as a “stabilizer” has been further strengthened.

Based on the asset allocation disclosed in mutual funds’ 2025 annual reports, mutual funds have increased the力度 of their equity-market deployment and are seizing opportunities that are structural in nature.

At the same time, when looking at changes in the size of equity funds, index funds are becoming investors’ “favorite.” The data show that ETFs (exchange-traded open-ended index funds), in which index funds occupy a dominant position, saw their total scale increase by 2.29 trillion yuan throughout 2025, up 61.29%. By the end of last year, the total scale exceeded 6 trillion yuan. During the year, 350 products were issued, bringing the total number to over 1,400.

In addition, in terms of mutual funds’ asset allocation structure, manufacturing remains a core allocation area. The data show that, as of the end of last year, the market value of mutual funds’ stock holdings in manufacturing accounted for 55% of total market value, reaching nearly 5 trillion yuan. As an economy pillar industry, manufacturing’s business cycle has continued to improve, attracting long-term allocation by mutual funds. Meanwhile, some fund managers’ investment strategies tend to choose sectors with steady growth to meet investors’ demand for stable returns. Fund flows also reflect recognition of manufacturing’s resilience.

Overall, in 2025 mutual funds continued to increase their allocation to equity assets, especially by using index funds to accelerate entry into the market, reflecting their long-term optimism about China’s economic recovery and industry development.

Multiple fund annual reports state that in 2026, China’s economy will continue to improve, and sectors with improved earnings expectations will remain the investment main theme for a relatively long period.

The annual report of the 嘉实上证科创板芯片ETF fund (a fund-of-funds connection initiated by the 嘉实上证科创板芯片ETF) says that in 2026, China’s equity market is expected to continue a structural trend under the resonance of multiple positive factors. The core driving force will shift from valuation recovery to earnings improvement. Macroeconomic policies are expected to remain accommodative, providing support for the market. At the same time, global monetary policy is trending toward easing and expectations for the U.S. dollar are weakening, which could improve liquidity in emerging markets and attract global capital to increase allocation to Chinese assets. In addition, the transfer of domestic residents’ assets toward the equity market, as well as long-term capital such as insurance capital entering the market, will also provide important incremental liquidity.

(Editor: Xu Nannan)

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