Recently, a number of technology-themed funds have lifted restrictions on subscriptions, while a batch of new funds has been established one after another. Is the technology sector about to welcome new investment opportunities?

The reporter noted that since September, after the technology sector fluctuated and pulled back from highs, valuations have been digested to a certain extent, and many funds heavily positioned in technology stocks have raised their subscription caps. Among them, two funds under E Fund raised their large-subscription cap to 500,000 yuan; one product under China Europe Fund resumed large-subscription business for non-individual investors. Interviewees said the growth logic of the technology industry has not changed, but from an investment perspective, differentiation within the sector is significant. In the fourth quarter, the market is expected to fluctuate upward, but attention must be paid to the impact of changes in the overseas macroeconomic environment.

Multiple Funds Loosen Restrictions

On September 22, E Fund issued an announcement adjusting the large-subscription caps of its E Fund Information Industry and E Fund Information Industry Select funds, raising the single-day single-fund-account subscription limit from the previous 10,000 yuan to 500,000 yuan. These two funds had tightened subscription quotas since June this year, and this is the first substantial easing of subscription restrictions. Wind data shows that as of the end of the second quarter this year, the scales of E Fund Information Industry and E Fund Information Industry Select were 21.144 billion yuan and 13.824 billion yuan respectively, both managed by fund manager Zheng Xi; as of September 23, both funds had year-to-date returns exceeding 50%.

China Europe Information Technology announced on September 3 that, in order to meet the investment needs of the broad investor base, it would remove the limits on the amount of single or multiple subscriptions, conversion transfers, and regular fixed-amount investment business for non-individual investors in a single fund account on a single day. In addition, since the second half of the year, many funds mainly investing in technology stocks, such as Huashang Advantage Industry, Huashang Balanced Growth, and Huatai-PineBridge Quality Growth, have also successively relaxed or canceled large-subscription restrictions. Fund semi-annual reports show that at the end of the first half, the above funds were mainly heavily positioned in AI industry chain stocks such as New Easy Sheng, Zhongji Xuchuang, Yuanjie Technology, China Micro Corporation, and Dongshan Precision.

While equity funds have lifted subscription restrictions, September ushered in a small peak in the issuance of new technology-themed funds. Wind data shows that as of September 23, among the 55 newly established ETFs (exchange-traded funds) and their feeder funds that month, the number of technology-related ETFs such as computing power, artificial intelligence, chips, and robots totaled more than 15. Among them, the ChiNext Computing Power Infrastructure ETF was the most popular, with 9 similar products established in September, raising a total of 5.37 billion units. At the same time, the technology sector has started a significant pullback since its July high. The STAR 50 Index continued to decline after touching an intraday historical high of 2,255.25 points on July 1, falling to an intraday low of 1,516.2 points on September 11, with a cumulative drawdown of more than 30%. Sub-sectors such as optical communications and chips suffered concentrated selling by funds. Data shows that as of September 24, the communications and electronics industry indices had both risen more than 34% year-to-date, taking the top two spots among the 31 primary Shenwan industries, but obvious differentiation has emerged within the sector, and some targets whose earlier gains were excessive have entered a stage of valuation digestion.

How Should the Technology Sector Be Invested In?

Regarding the move by technology-themed funds to raise subscription limits, Zhang Pengyuan, a researcher at PaiPaiWang Wealth, believes this reflects fund managers' recognition of the medium- and long-term industrial value of the technology track. In particular, the growth logic of industries such as AI, satellites, and software has not changed. After adjustment, structural opportunities in the sector have emerged, and lifting purchase restrictions may indicate that fund managers have confidence in the long-term prospects of their holdings. "When the sector was very hot earlier, setting purchase limits was intended to prevent large inflows of funds from diluting the returns of existing holders; after the current market pullback, raising the subscription cap absorbs incremental funds, supplements capital for subsequent position adjustment and allocation, and buffers the impact of redemptions," Zhang Pengyuan further stated.

How should the technology sector be invested in after adjustment? He Li, general manager of Zhiyu Zhishan Investment, analyzed to the reporter that at present, the valuations of the two main lines within the technology sector show a markedly divergent pattern. First, the domestic technology chain represented by the STAR 50 Index still has relatively high absolute valuation. "Its current trailing price-to-earnings ratio is 133 times, at the 80th percentile of the past 10 years, while the PB percentile is as high as about 94%. The technology security narrative has led to the coexistence of high valuation and high crowding." He believes that under the subsequent pressure from financing and share unlocking, the valuation of the domestic chain faces a stress test. Second, the overseas chain represented by the ChiNext Index has seen its valuation return to neutral, with a current trailing price-to-earnings ratio of 37 times, at a neutral-to-low level in the 25th percentile of the past 10 years. Combined with expected earnings and valuation data for 2026, He Li believes that the index's valuation and growth are well matched.

Looking ahead to the market outlook, the latest view from Wanjia Fund pointed out that with limited incremental funds, the overall market still shows a relatively obvious characteristic of style rebalancing. The market had previously priced in macroeconomic disturbances fairly fully, and in the fourth quarter the market is expected to fluctuate and slowly move upward on the basis of broadening and rotating market trends. However, given the U.S. midterm elections and continued disagreement over the number of rate hikes, further overseas macroeconomic disturbances still cannot be completely ignored.