Public fund marketing reached new heights as HuaAn Fund orchestrated a company-wide campaign, from the chairman to rank-and-file employees, by naming an entire high-speed rail train after its product, a first in the industry's history.

At 11:52 on September 23, a high-speed train emblazoned with the slogan "HuaAn Fund, ChiNext 50, Technology on the E-Route" departed from Shenzhen North Station bound for Shanghai. The exterior of the train, as well as the interior carriages and seats, were fully covered with advertising for the HuaAn ChiNext 50 ETF, complete with its product code.

The route spans nine provinces and municipalities including Shanghai, Guangdong, Jiangsu, Zhejiang, Fujian, Hubei, Anhui, Chongqing, and Shandong, covering 77 cities and 178 stations, exposing millions of passengers to a public fund product on an unprecedented scale. In 2026, the HuaAn ChiNext 50 ETF will mark its tenth anniversary of listing, and the company's chairman attended the inaugural departure ceremony, rallying employees to promote the product with a strong sense of occasion.

The product is one of the first ETFs in the market to track the ChiNext 50 Index, established on June 30, 2016. Since its listing, both its scale and performance have fluctuated considerably, closely mirroring the trajectory of the ChiNext 50. Its scale surpassed 30 billion yuan in 2025, but has since shrunk to 25.5 billion yuan.

Behind the contraction in scale, as concerns over an AI bubble intensified in June, a wave of selling hit technology stocks in the capital markets, with the ChiNext index falling particularly sharply. The HuaAn ChiNext 50 ETF plunged 24% over the past three months, and its decline from its peak exceeds 27%.

Funds of this type are generally suitable for growth-oriented investors, yet most members of the public have limited knowledge of wealth management. HuaAn Fund indiscriminately promoted a high-risk product in public spaces, raising questions about whether it adequately disclosed investment risks.

What is even more striking is the dismal performance record of the HuaAn ChiNext 50 ETF's fund manager. The manager, Xu Zhiyan, previously worked in financial engineering at GF Securities and at the postdoctoral research station of Sun Yat-sen University's School of Economics and Management. He joined HuaAn Fund in 2005 and previously served as a quantitative strategy analyst in the research and development department. He currently manages 11 products with total assets under management of 196.6 billion yuan, all of which are ETFs, while HuaAn Fund's total ETF scale is only 200 billion yuan.

Furthermore, although Xu Zhiyan exclusively manages passive index funds, and despite the ChiNext Index doubling since September 24, his funds have lost 16% over the past three years, with a total loss of 30% and an annualized return of negative 2.05%. He previously stepped down from products, most of which concluded hastily with losses of 30-40% during his tenure.

Of course, the performance returns of passive index funds are not attributable to the fund manager. However, when products under the same manager lose 16% over three years with an annualized return of negative 2%, one must ask whether the direction, theme, or sector selection has gone wrong. With such devastating performance, HuaAn Fund spared no expense in naming a high-speed rail train to aggressively promote its product. Is this protecting investor interests, or sacrificing them at the altar of scale at any cost?

As of now, the merger prospects between HuaAn Fund and Haitong Fortis Fund remain unclear. According to market analysis, various signs suggest that HuaAn Fund's leadership is gaining the upper hand, particularly through the recruitment of senior talent with extensive pension experience. However, regarding HuaAn Fund's leadership in the merger, multiple media outlets cited internal sources from both sides to deny the reports, stating that "relevant matters are still under deliberation and research, and the plan has not yet been finalized."

Due to the merger between Guotai Junan and Haitong Securities, under the "one participation, one control" policy for fund management companies, the merger of the two brokerages would result in four public fund companies. Currently, both Guotai Junan and Haitong each hold "one participation, one control." Guotai Junan owns HuaAn Fund and Guotai Junan Asset Management, with shareholdings of 51% and 100% respectively. Haitong controls Haitong Fortis Fund and Haitong Asset Management, while also holding a 27% stake in Fullgoal Fund, constituting one participation and one control.

At the time, market participants speculated on several possible scenarios for the subsequent evolution: first, HuaAn Fund absorbing Haitong Fortis Fund; second, Haitong Securities transferring its stake in Haitong Fortis Fund, allowing Haitong Fortis to exist independently; third, special arrangements being made for the merged brokerage, permitting the new entity to control two fund companies.

The reason this matter has remained unresolved is primarily because Haitong Fortis Fund is one of the few public fund institutions in the industry that simultaneously holds qualifications as a domestic delegated investment manager for social security funds, an investment manager for enterprise annuities and occupational annuities, and an investment manager for basic pension insurance funds. It has full coverage of the three pillars of pension licenses, and such qualifications are rarely approved for new applicants, making them extremely valuable. Merging it into HuaAn would not comply with regulations.

At the time, the market believed that HuaAn Fund and Haitong Fortis Fund were more likely to stage a "small eating big" scenario. Later, reports emerged that HuaAn Fund would take the lead, with equally compelling reasons. First, the Guotai Junan-Haitong merger is led by Guotai Junan, and it would be difficult for the Haitong Fortis team to lead the subsidiary merger. Second, HuaAn Fund has made frequent senior management personnel moves, possibly aimed at the pension business.

HuaAn Fund Chairman Xu Yong previously worked within the government for 11 years, possessing extensive experience in pension and disciplinary compliance work. He served as deputy general manager at Changjiang Pension, overseeing enterprise annuity business. According to reports, Yan Tao, former assistant to the general manager of Changjiang Pension Insurance Co., Ltd., is about to assume the role of deputy general manager at HuaAn Fund. This personnel arrangement is also seen as an important signal that HuaAn Fund is strengthening its pension business layout ahead of the merger.

The third point, as previously speculated by the market, is no longer about Haitong Fortis being transferred out, existing independently, or Haitong Fortis Fund attempting a snake-swallows-elephant move. The current focus is on the third scenario: special approval, such as changing the manager of social security and annuity funds to the newly merged company, or HuaAn Fund potentially making Guotai Junan Asset Management the actual controller to circumvent the direct merger of the two fund companies, thereby bypassing the technical difficulties of license succession.

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