This is the best of times, this is the worst of times, this is the spring of hope, this is the winter of despair.

Written 167 years ago, Charles Dickens' novel has accidentally become the perfect summary for fund holdings at the end of the second quarter of 2026.

According to the latest second-quarter reports, actively managed equity funds have undergone a revolutionary portfolio shift. Familiar 'core asset' names such as Tencent Holdings, Kweichow Moutai, Zijin Mining, and Alibaba have all fallen out of the top 20 holdings.

In their place is a new cohort of hard-tech companies: Cambricon, NAURA Technology, GigaDevice, Yuanjie Technology, AMEC, and CCTC.

Adding names like Zhongji Innolight, Eoptolink, and Dongshan Precision—known as the 'Optical Module Trio'—the top ten heavyweight stocks of public funds have become completely 'AI-ified.'

This dramatic portfolio shift is reminiscent of capital markets across the Pacific. As the calendar turns to July 2026, professional domestic institutions and investors over there are having a 'powerful resonance.'

Note: Data source: Wind Terminal, statistics range covers general stock funds and hybrid funds.

01: Communication and Electronics Dominate 18 of the Top 20 Heavyweight Stocks

What kind of extreme market was the second quarter?

Looking at the second-quarter reports will give you the answer.

Wind statistics show that by the end of the second quarter, the top 20 heavyweight stocks of public active equity funds included 18 companies from the communication and electronics industries.

The 'optical module leader' Zhongji Innolight remained the largest heavyweight stock for active funds, with a holding market value of RMB 166.019 billion.

It was closely followed by its peer Eoptolink, with RMB 136.528 billion.

In third place was Dongshan Precision, the 'halfway convert to optical modules,' while 'chip manufacturer' Cambricon ranked fifth.

The only non-AI company among the top five heavyweight stocks was CATL.

Positions six through ten were entirely occupied by electronics stocks: NAURA Technology, GigaDevice, Yuanjie Technology, AMEC, and CCTC.

Looking at the top 20, besides WuXi AppTec (18th) and CATL, every single stock was from the communication or electronics sector.

02: Half of Total Holdings in TMT

If you look across all heavyweight stocks, the active fund heavy positions in Q2 show an even more pronounced concentration pattern.

First, the AI computing chain remains at the core. Zhongji Innolight and Eoptolink hold the top two spots, with Yuanjie Technology entering eighth place, indicating that optical modules and optical chips remain a primary focus for institutions.

Second, fund heavyweights are radiating across the entire AI industry chain. The top 20 now cover domestic AI chip maker Cambricon, CPU/DCU manufacturer Haiguang Information, wafer foundry SMIC, semiconductor equipment firms NAURA Technology, AMEC, Skyverse Technology, Changchuan Technology, and Takano Technology, as well as PCB and material companies Wus Printed Circuit, Shengyi Technology, and CCTC.

Third, the position of traditional 'core assets' has clearly shifted back, and may continue to do so. Non-tech industry leaders like Tencent Holdings, Kweichow Moutai, Zijin Mining, and Alibaba have all fallen out of the industry's top ten. WuXi AppTec dropped from 9th to 18th. While CATL remains in the top five, both its holding market value and share count have decreased.

Fourth, the concentration of heavyweight industries has significantly increased. Among all heavyweight stocks at the end of Q2, the combined market value proportion of electronics and communication sectors reached 58.34%, an increase of 26.8 percentage points from the end of Q1. The sensitivity of active fund portfolios to the AI industry's prosperity, the performance delivery of related companies, and valuation fluctuations is also noticeably rising.

03: AI Propels a Traditional Company's Ranking Up 126 Places

Among the top 20 heavyweight stocks in Q2, the company with the fastest ranking improvement was CCTC. As a veteran electronic ceramics company, its products have found new market demand amid the AI explosion, earning recognition from fund managers.

In Q2, active funds increased their holdings in the company by 145 million shares, boosting its holding market value from less than RMB 3 billion to RMB 33.5 billion. Ranked by total holding market value, it skyrocketed from 136th place at the end of Q1 to 10th place, an improvement of 126 spots.

Another veteran electronics company, Shengyi Technology, had a similar experience. Its core product, copper-clad laminate (CCL), is a key base material for PCBs, which are crucial supporting components for optical modules. Ultimately, both became 'light-related' assets.

In Q2, active funds increased their holdings in Shengyi Technology by 106 million shares. Its holding market value surged from less than RMB 3.8 billion to nearly RMB 30.5 billion, moving from 100th place to 15th place.

Aside from these two electronics stocks that virtually 'soared' in their holdings, other electronics stocks also performed well. Changchuan Technology rose from 54th to 17th, Skyverse Technology from 48th to 16th, SMIC-H from 34th to 13th, and Cambricon from 24th to 4th.

From an industry distribution perspective, these ranking-jumping stocks are concentrated in areas like electronic ceramics, copper-clad laminates, wafer foundry, semiconductor inspection and testing equipment, and domestic AI chips. This indicates that the fund allocation pivot has extended from the middle of the computing chain (optical modules) further into chip manufacturing, equipment, materials, and component segments.

04: Top of the 'Most Bought' List Focuses on AI Hardware

Ranked by the quarter-on-quarter increase in total holding market value at the end of the quarter, Zhongji Innolight, Eoptolink, Cambricon, Dongshan Precision, and NAURA Technology were the top five stocks most heavily bought by active funds in Q2.

Among the top 20 most-bought stocks, there were 17 electronics stocks and 2 communication stocks. Only China Jushi came from the building materials industry.

But remember, Jushi is a producer of electronic yarn, which plays a vital role in PCBs. So, ultimately, it's still an 'all-in AI family.'

Looking deeper at the top 20 stocks most bought by active funds, their business primarily revolves around three AI sub-industry chains.

The first is the global AI computing infrastructure chain, including Zhongji Innolight, Eoptolink, Yuanjie Technology, and Wus Printed Circuit. Market focus is gradually shifting from optical modules to optical chips, PCBs, servers, and precision manufacturing.

The second is the domestic semiconductor industry chain, including Cambricon, Haiguang Information, GigaDevice, SMIC, Hua Hong Grace, and equipment makers like NAURA Technology, AMEC, Skyverse Technology, and Changchuan Technology. Coverage now spans multiple stages from chip design and wafer manufacturing to equipment, inspection, and testing.

The third is the computing foundational components chain, exemplified by China Jushi from the building materials industry. This reflects some capital beginning to spill over into material segments and cyclical products.

05: Internet, Baijiu, Energy, and Resources Collectively 'Step Aside'

Compared to the market value increase list, the list of reduced holdings is even more clear-cut: Non-AI industry star companies are crowded on this list.

Tencent Holdings topped the list with a market value reduction of over RMB 18.7 billion, followed by CATL, Kweichow Moutai, Alibaba, and Zijin Mining.

Companies that once held core positions in active fund heavyweights—Internet, baijiu, new energy, energy, and non-ferrous metal leaders—generally experienced a noticeable contraction in holdings.

Furthermore, for the 20 stocks with the most significant decreases in holding market value, the number of shares held by active funds also declined in Q2. This indicates that the market value reduction wasn't just due to stock price changes but was generally accompanied by actual fund position reduction.

In the top 20 most-sold list, Moutai, Wuliangye, Shanxi Fenjiu, and Luzhou Laojiao all faced selling pressure, showing that baijiu no longer serves as a 'ballast stone.' In the Internet sector, the heavyweight rankings of Tencent and Alibaba also dropped significantly. In the new energy sector, CATL, BYD, and Qinghai Salt Lake Industry all saw reductions.

Worth noting is that resource stocks like Zijin Mining, Chifeng Jilong Gold, Zhongjin Gold, and CNOOC also appeared prominently on the sell list. This suggests that the Q2 portfolio adjustments involved not just a switch from consumer to growth stocks but also profit-taking in previously strong-performing sectors like energy and precious metals to free up capital for the tech direction.

It is indeed a case of tech 'draining' everything else.

This kind of extreme market environment, while its end cannot be predicted, will obviously not last forever.

In the long run, the market's inherent adjustment mechanisms and the inherent balancing mechanisms of the national economy will both come into play, moderately balancing investment opportunities.

Looking further ahead, technology can continue to shine, but other industries should not be completely silenced.