In 2025, China's A-share market showed signs of recovery supported by economic revival and policy backing, with technology, cyclical, and high-end manufacturing sectors taking turns to drive activity. Investor confidence improved significantly, leading the mutual fund industry toward net asset value recovery and scale expansion.

As one of China's first "Big Five" mutual fund companies, Huaan Fund Management's assets under management reached 822.5 billion yuan by the end of June, representing a 6.5% increase from the previous year-end and continuing its steady growth trajectory.

However, a deeper analysis of its operations and internal structure reveals that behind the impressive scale expansion lie pressing issues including underperforming active equity investments, investment research team volatility, compliance management challenges, and unclear future integration directions, drawing significant market attention to its long-term competitiveness.

**Structural Imbalance with Continued Pressure on Active Equity**

Huaan Fund Management Co., Ltd. was established in 1998 with registered capital of 150 million yuan. Over the past five years, the company has maintained overall scale expansion, but this growth conceals significant structural imbalances: fixed income and passive index products have become core pillars of scale expansion, while active equity business continues to shrink, gradually deviating from the industry's "equity-focused, strong active management" development direction.

From a product structure perspective, fixed income and passive businesses are the main drivers of company scale growth. From 2020 to 2025, Huaan Fund's money market fund scale increased from 194.98 billion yuan to 303.86 billion yuan, growing 55.84%; bond funds grew from 56.94 billion yuan to 137.97 billion yuan, up 142.3%; index funds showed the most outstanding performance, soaring from 57.96 billion yuan to 178.22 billion yuan, surging 207.46%.

Among these, Huaan Gold ETF (518880) achieved an annual return of 43.74% as of September 24, 2025, with a scale reaching nearly 60 billion yuan, becoming one of the leading gold ETFs in its category. The scale of this single product approaches the total of all the company's active equity funds combined, reflecting the important position of index products within Huaan Fund.

In stark contrast, active equity product scales continue declining. Equity fund scales dropped from 3.26 billion yuan at the end of September 2020 to 2.32 billion yuan in July 2025, shrinking nearly 30.1% over five years; hybrid funds fell from 109.43 billion yuan to 81.94 billion yuan, a decline of 25.12%. Despite briefly surging to 183.93 billion yuan in 2021, they have declined for three consecutive years since.

The fundamental reason for active equity contraction lies in poor performance. Data shows that as of September 6, 2025, among Huaan Fund's equity funds established for more than three years, 35.14% of products' three-year returns failed to match the CSI 300 Index's 11.6% gain over the same period; hybrid funds' average three-year return was only 7.95%, trailing the CSI 300 Index by 3.65 percentage points, with active management capabilities falling short of market expectations.

Looking at specific fund managers, performance remains lackluster. Wang Chun, who has managed Huaan Quality Leading Hybrid A since 2022, delivered a tenure return of -34.08%, far below the benchmark; Huaan Quality Leading Hybrid C and Huaan New Energy Theme Hybrid C showed tenure returns of -35.32% and -24.24% respectively. Even Huaan Hongli Hybrid A, managed for nearly ten years, achieved only a cumulative return of 52.49%, lacking long-term competitiveness.

The "one manager, multiple funds" situation further exacerbates the predicament. Co-Chief Equity Investment Officer Wan Jianjun simultaneously manages 15 partial equity hybrid funds with total scale of approximately 6.9 billion yuan, but his managed Huaan Research Selected Hybrid C shows a cumulative return of -25.98%, and Huaan Research Smart Selection Hybrid C returns -24.73%, both consistently lagging benchmarks.

Jiang Qu manages 16 funds with total scale exceeding 5.2 billion yuan, with multiple products showing negative tenure returns and product homogenization issues. For example, Jiang Qu's managed Huaan Growth Pioneer Hybrid A and Huaan Manufacturing Upgrade One-Year Hold Hybrid A share 7 of their top 10 holdings; Wan Jianjun's two research series funds show similar situations, making it difficult for investors to achieve effective diversification through different products.

This poor performance directly reflects in investment-side financial data. According to Choice data, from 2022 to 2024, Huaan Fund's equity investment trading gains were negative for three consecutive years at -25.3 billion yuan, -14.4 billion yuan, and -3.95 billion yuan respectively, with cumulative losses of nearly 43.7 billion yuan. Although bond investment returns continued growing at 6.54 billion yuan, 6.78 billion yuan, and 8.43 billion yuan respectively, they still cannot offset the massive equity-side losses.

In contrast, the company's management fee income remained stable, totaling 8.97 billion yuan over three years. The contradiction of "investors losing money while fund companies profit" has triggered widespread market questioning about fee structures and interest alignment.

In the first half of 2025, benefiting from market recovery, equity trading gains turned positive at 690 million yuan, but warrant trading losses remained at 110 million yuan, indicating persistent volatility risks.

According to parent company Guotai Haitong's 2025 interim report, Huaan Fund reported operating revenue of 1.558 billion yuan, up 7.15% year-over-year; net profit was 500 million yuan, down 3.66% year-over-year. Revenue growth mainly came from management fees, but profit decline reflects insufficient profitability on the investment side, with the overall profit model's sustainability still facing challenges.

**Investment Research and Management Turbulence Creating New Challenges**

Beyond business structure imbalances and performance difficulties, Huaan Fund has also faced challenges from investment research team instability and frequent management changes in recent years.

In terms of investment research teams, core personnel turnover has been frequent. Since 2022, several prominent fund managers including Cui Ying and Xie Changxu have successively departed. Cui Ying's outstanding performance during bull markets made her departure weaken the company's equity investment strength; Xie Changxu joined China Universal Asset Management, further amplifying the impact of team losses.

The fixed income sector was similarly impacted, with Sun Lina, dubbed the "fixed income queen," stepping down in March 2025, involving management scale of nearly 300 billion yuan, dealing a severe blow to the fixed income team. The core combination once called "Huaan TFBOY trio" now has only Hu Yibin remaining in management, while Li Xin officially departed in May 2025. Frequent talent losses not only affect internal team stability but also undermine confidence from external institutional clients and channels.

On the equity investment side, new fund managers' operational strategies have also drawn attention. After Guan Peng took over Huaan SOE Reform Fund in June 2025, he significantly repositioned toward large financial sectors, heavily weighting Shanghai Bank, Fujian Expressway, and other targets. However, these targets performed poorly year-to-date, causing overall fund performance pressure and raising market questions about the company's internal verification and risk control capabilities. How to maintain flexibility while ensuring controllable risks has become an urgent issue for Huaan's equity business.

At the senior management level, frequent changes have brought uncertainty to company development. In August 2025, Chairman Zhu Xuehua, who served for 11 years, retired and was succeeded by Xu Yong. During Zhu Xuehua's tenure, the company's scale grew from 60 billion yuan to 700 billion yuan, promoting innovative products like Gold ETF, Germany 30 (DAX) ETF, and Zhangjiang Guangda Garden REITs. However, his adjustments to active equity business failed to reverse the performance slump. Due to the "heavy fixed income, light equity" development path, the company's hybrid fund management fee contribution declined, with operating revenue and net profit declining consecutively from 2021 to 2024.

Xu Yong's appointment marks the company entering a new governance phase. He has experience across government, insurance, and fund industries, having served as general manager at China Merchants Fund, where he drove scale growth exceeding 100 billion yuan. However, Huaan Fund's current challenges are more complex: scale growth overly dependent on fixed income and index products, lagging active equity transformation, frequent talent mobility, and damaged brand reputation in equity investment. How to stabilize the team in the short term and improve equity business in the long term will be core tests during his tenure.

In fact, reviewing the past decade, management changes have become routine at Huaan Fund. Since 2020, positions including general manager, chief compliance officer, and deputy general managers have all changed hands multiple times, affecting strategic continuity. This instability has somewhat weakened investment research team cohesion and execution capabilities.

Huaan Fund experienced brief glory from 2015 to 2021. The company introduced and cultivated multiple excellent fund managers, creating high-return products. From 2019 to 2021, 39 funds achieved returns exceeding 100%, with 19 exceeding 200% and 7 exceeding 300%. In 2021, hybrid fund scale reached 183.90 billion yuan, accounting for over 30%. However, as white-chip stock markets peaked, performance quickly declined. From 2022 to 2024, hybrid fund returns declined consecutively. Despite market recovery in 2024, among the company's 157 hybrid funds, 42 still lost over 20%, accounting for nearly one-third.

**Industry Landscape Changes and Future Uncertainties**

Beyond internal issues like performance and talent, Huaan Fund also faces external uncertainties from industry landscape changes. In 2025, after Guotai and Haitong Securities completed their merger, according to regulatory requirements of "one participation, one control, one license," Huaan Fund and Haitong Asset Management need future integration. Haitong Asset Management holds scarce licenses including National Social Security Fund management, with significant resource value. The market widely focuses on whether business restructuring or brand integration will occur during the integration process between the two companies. If Huaan Fund loses its independent identity, it would inevitably impact employees, investors, and channel partners.

This uncertainty intensifies market concerns about the company's future direction. For institutional clients, whether fund companies can maintain long-term brand independence and strategic stability is an important factor determining cooperation willingness. If the integration process experiences setbacks or lacks clear communication mechanisms, risks of channel and client losses are unavoidable. How to balance investor interests, employee rights, and company strategic demands during potential integration becomes a topic Huaan Fund must confront in the future.

From a broader industry background, the mutual fund industry is experiencing a new round of reshuffling. Under the trend of continuously increasing industry concentration, leading companies continue strengthening advantages, while mid-sized fund companies need to build stronger differentiated strategies in investment research, channels, and branding to establish themselves. Although Huaan Fund's scale ranks in the industry's upper-middle level, the continued weakness in active equity, core talent losses, and compliance risk control concerns make it face more uncertainties in the industry competitive landscape. Combined with integration uncertainties with Haitong Asset Management, the company's future direction deserves close attention.

In the external environment of industry recovery and scale expansion, Huaan Fund demonstrates certain growth resilience, with total assets under management exceeding 820 billion yuan confirming its advantages in passive and fixed income products. However, long-term weakness in active equity, investment research team volatility, compliance risk exposure, and potential integration uncertainties constitute multiple challenges on the company's future development path. From product performance to corporate governance, from talent stability to industry landscape, the problems facing Huaan Fund are not isolated but interconnected results. For this fund company with "Big Five" background, how to repair equity shortcomings while maintaining scale advantages, stabilize teams, and respond to external integration pressures will determine whether it can maintain a leading position in the industry's new round of competition.