By the end of 2025, Guotai's Multi-Asset Allocation Department had delivered an outstanding performance report.
Guotai Youxuan Linghang One-Year Holding (013279) surged to the top with a formidable 66.14% return, also ranking first in its category over the past two and three years.
Another bond FOF fund, Guotai Ruiyue, also performed exceptionally well, ranking first in its category for 2025 and second over the past two years.
Performance of selected representative products:
Data source: Wind, Galaxy Securities, data as of December 31, 2025. Peer group definitions: Guotai Youxuan Linghang's peers refer to Galaxy Securities Hybrid FOFs (Equity Assets 60%-95%) (Class A); Guotai Wenjian Shouyi's peers refer to Galaxy Securities Hybrid FOFs (Equity Assets 0-30%) (Class A); Guotai Ruiyue's peers refer to Galaxy Securities Bond FOFs (Class A). Past fund performance is for reference only and does not constitute investment advice or indicate future performance. While leading performance for a single year might involve an element of luck, sustained leadership over multiple consecutive years certainly warrants a deeper analysis.
The name "Zeng Hui" is inseparable from any discussion of Guotai's Multi-Asset Allocation Department. As the department's Chief Investment Officer, he possesses extensive multi-asset allocation experience and serves as the fund manager for several of the aforementioned products.
Regarding asset allocation, Zeng Hui has developed his own unique understanding and methodology. Unlike many in the market who misinterpret asset allocation as a simple "assortment platter" of different assets, he believes it is neither about "equal allocation" nor "static allocation." Instead, focus should be directed towards the most aggressive opportunities to enhance returns, while also implementing tactical timing and rigid risk controls to manage portfolio drawdowns.
Traditional static allocation often relies on historical correlations to distribute assets, but it has become apparent that this approach struggles to handle systemic risks, especially amidst the recent rise of quantitative strategies and the rapid development of ETFs. The FOF investment model is undergoing a seismic shift. Consequently, investment methodologies must also evolve to the next stage: tactical rotation.
The Taiji Quantitative Rotation Model In Zeng Hui's view, the market resembles the black and white poles within a Taiji diagram, perpetually cycling between overbought and oversold conditions. The key to investing lies in capturing the turning points at these two "poles," rather than obsessing over fair value pricing around the mean.
Compared to traditional multi-asset static allocation models, the Taiji Quantitative Rotation Model uses the extremes of overbought-oversold conditions as its core investment framework. It comprises four main components: macro risk-control timing, meso-industry risk-control rotation, enhancement strategies for four underlying asset classes, and rigid risk control based on quantitative principles and systems. This framework not only links various assets within a medium-to-long-term cycle structure but also enables the continuous accumulation and iteration of algorithmic models within each asset class.
The so-called "overbought-oversold" framework is based on the premise of normal market fluctuations: prices that rise excessively will eventually fall, and those that fall excessively will rise, perpetually cycling between two extremes. Therefore, accurately identifying the peaks of overbought and oversold conditions becomes critically important.
Sell and buy points are determined based on overbought-oversold judgments, combined with the macro risk-control model. During overbought conditions, the macro risk-control model issues warnings, triggering sell signals; similarly, it prompts buying during oversold conditions to capture market opportunities.
In a periodic report for Guotai Ruiyue, Zeng Hui wrote: "Relying on the commodity macro risk-control timing model, the gold ETF we held triggered relevant risk-control signals during the significant volatility in early April. Consequently, we gradually reduced our gold position during the subsequent rebound and switched at a low point to a silver LOF which we strongly favored. As it turned out, although gold performed strongly, silver's performance surpassed gold's after Q2, exhibiting strong catch-up momentum, with silver's price having doubled by 2025."
Controlling Drawdowns is Paramount, Executed Quantitatively In Zeng Hui's investment philosophy, "controlling drawdowns is paramount" is regarded as the primary choice and an inviolable底线 (dǐxiàn - bottom line). He states that "pursuing alpha is an art, but controlling drawdowns is a matter of science, execution, and process."
Achieving excess returns relies importantly on subjective fundamental methods, which are more artistic and not entirely scientific, allowing for inspiration and opportunity identification. However, subjective investment methods are weak in controlling drawdowns because risk control leans more towards science. By following a defined process, drawdowns can be managed effectively, but any hesitation makes control difficult. Therefore, a quantitative system is necessary to counter human bias and ensure implementation.
Based on this philosophy, Zeng Hui restructured Guotai's Multi-Asset Allocation Department, requiring all team members not only to possess programming skills but also to gain deep expertise in the fundamentals of the four asset classes.
Zeng Hui stated, "The significance of the quantitative system lies first in quantizing, algorithmizing, and automating our traditional thought processes. Secondly, it centers daily work around factor backtesting, continuously searching for new factors and investment logic, allowing our investment system to remain open to iterative updates and evolution through principle renewal. Finally, the role of quantification in risk control is decisive. Whether for macro or industry risk control, it requires the collection and deployment of numerous indicators, models, and algorithms. At the portfolio level, rigid, quantitative risk control represents the true, final line of defense."
The Evolution of the FOF Fund Manager Discussing the future of FOFs, Zeng Hui believes fund managers may evolve into brutally competitive "quadrathletes."
"Future FOF managers will compete on the same stage as single-asset fund managers, quantitative teams, and cross-border strategists. It will no longer be an insular manager selection model but a残酷 (cánkù -残酷) battle royale. This mechanism has low error tolerance; in volatile markets, a misjudgment in any single asset class could lead to overall portfolio drawdowns, necessitating 'mastery' in each area."
For the individual, this requires deep research into four underlying asset classes—not just understanding stocks and bonds, but also commodity supply/demand, overseas market rules, etc.—placing high demands on personal drive, multi-asset practical experience, and programming ability.
Yet, it is precisely based on this standard of all-around talent that one can be better suited to the multi-asset allocation capabilities required by FOFs, enabling better drawdown control and return pursuit.
Taking Zeng Hui himself as an example: holding a Master's in Finance from Fudan University, with 23 years of asset allocation experience, beginning equity research and investment in 2008, and managing public/private FOFs since 2015. His rich practical experience has led him to develop a subjective + quantitative investment system. Coupled with his experience allocating across stocks, bonds, commodities, and overseas assets, he has cultivated a keen sense for timing and sector rotation, better assisting investors in risk prevention and opportunity capture.
Starting January 19th, the Guotai Multi-Asset稳健 (wěnjiàn -稳健)领航 (Linghang - Leading Navigation) 6-Month Holding Period FOF (025798), managed by Zeng Hui, will officially launch. Its investable universe covers equity assets, Hong Kong Stock Connect securities, QDII funds, etc. With the evolution of FOF investment methodology, bolstered by the fund manager's successful track record in multi-asset allocation, there is heightened anticipation and confidence regarding the new product's potential performance.
Guotai Multi-Asset稳健领航 (Wenjian Linghang) 6-Month Holding Period FOF (025798) Risk Disclosure Data source: wind, as of 2025/12/31. Views are for reference only, subject to change with market conditions, and do not constitute investment advice or承诺 (chéngnuò -承诺). Market risks exist; invest cautiously. China's stock market has a relatively short history; past performance does not guarantee future results.
Guotai Multi-Asset稳健领航6-Month Holding Period FOF is a hybrid Fund of Funds (FOF). Theoretically, its expected risk and return levels are higher than money market funds, money market FOFs, bond funds, and bond FOFs, but lower than stock funds and stock FOFs. Investing in Hong Kong Stock Connect securities involves specific risks due to differences in investment environment, targets, market systems, and trading rules under the Hong Kong Stock Connect mechanism.
Guotai Youxuan Linghang One-Year Holding Period FOF is a hybrid Fund of Funds (FOF). Theoretically, its expected risk and return levels are higher than money market funds, money market FOFs, bond funds, and bond FOFs, but lower than stock funds and stock FOFs. Investing in Hong Kong Stock Connect securities involves specific risks due to differences in investment environment, targets, market systems, and trading rules under the Hong Kong Stock Connect mechanism.
Guotai行业轮动 (Hangye Lundong - Sector Rotation) One-Year Holding Period Hybrid FOF is a stock Fund of Funds (FOF). Theoretically, its expected risk and return levels are higher than money market funds, money market FOFs, bond funds, bond FOFs, hybrid funds, and hybrid FOFs. Investing in Hong Kong Stock Connect securities involves specific risks due to differences in investment environment, targets, market systems, and trading rules under the Hong Kong Stock Connect mechanism.
Guotai Ruiyue 3-Month Holding FOF is a bond Fund of Funds (FOF). Theoretically, its expected risk and return levels are higher than money market funds and money market FOFs, but lower than hybrid funds, hybrid FOFs, stock funds, and stock FOFs. Investing in Hong Kong Stock Connect stocks involves specific risks due to differences in investment environment, targets, market systems, and trading rules under the Hong Kong Stock Connect mechanism.
Guotai Youxuan Linghang One-Year Holding Period Hybrid Fund of Funds (FOF) (Inception Date 2022/01/05, Benchmark: 60%*CSI 300 Index Return + 30%*ChinaBond Composite Index Return + 10%*Hang Seng China Enterprises Index Return (Valuation Exchange Rate Adjusted), Managed by Zeng Hui since 2023/11/10. Performance/Benchmark from 2022 to H1 2025): -14.27%/-12.84%, -15.70%/-6.62%, 3.27%/14.67%, 11.11%/2.22%; Guotai行业轮动 (Hangye Lundong) One-Year Closed-End Stock (FOF-LOF) A (Inception Date 2022/07/19, Benchmark: 80%*CSI 300 Index Return + 20%*ChinaBond Composite Index Return, Managed by Zeng Hui since 2023/12/28. Performance/Benchmark from 2022 to H1 2025): -1.81%/-7.61%, -13.59%/-8.22%, -2.73%/13.70%, 6.91%/0.35%. Guotai Ruiyue 3-Month Holding Period Bond Fund of Funds (FOF) (Inception Date 2022/09/23, Benchmark: 95%*ChinaBond Composite Total Value Index Return + 5%*Bank One-Year RMB Time Deposit Rate (Post-Tax), Managed by Zeng Hui since 2024/03/05. Performance/Benchmark since inception): 0.12%/-0.83%, 3.05%/2.04%, 4.21%/4.80%, 2.14%/-0.09%. Investors should carefully read the fund's "Prospectus" and "Fund Contract" before making investment decisions, fully consider their own risk tolerance, and invest cautiously. Funds carry risks; invest carefully.
Dear Investor: Funds carry risks; invest with caution. Publicly offered securities investment funds are long-term investment tools primarily designed to diversify investments and reduce the specific risk associated with investing in a single security. Unlike bank savings and other financial instruments that offer fixed income expectations, when you purchase a fund product, you may share in the investment gains or losses generated by the fund according to your holding份额 (fèn'é -份额). Before making an investment decision, please carefully read the Fund Contract, Fund Prospectus, Fund Product Key Facts Abstract, and this Risk Disclosure Statement to fully understand the fund's risk-return characteristics and product features. Seriously consider all risk factors associated with the fund and, based on your investment objectives, investment horizon, investment experience, and asset status, fully assess your own risk tolerance. Make a rational and prudent investment decision based on an understanding of the product and suitability advice. In accordance with relevant laws and regulations, Guotai Asset Management Co., Ltd. provides the following risk disclosures: I. Based on different investment objects, funds are categorized into stock funds, hybrid funds, bond funds, money market funds, funds of funds, commodity funds, etc. Investing in different types of funds yields different return expectations and involves different levels of risk. Generally, the higher the expected return of a fund, the greater the risk you assume. II. Funds may face various risks during investment operation, including market risks, as well as the fund's own management risks, technical risks, and compliance risks. Large-scale redemption risk is a risk unique to open-end funds. When the net redemption requests on a single open day exceed a certain percentage of the fund's total shares (10% for open-end funds, 20% for定期开放 (dìngqī kāifàng -定期开放) funds, excluding special products specified by the CSRC), you may be unable to redeem all requested fund shares promptly, or redemption proceeds may be delayed. III. You should fully understand the differences between fund systematic investment plans (e.g., dollar-cost averaging) and savings methods like installment savings. Systematic investment is a simple way to guide investors toward long-term investment and average costs, but it does not avoid the inherent risks of fund investment, guarantee investor profits, or equate to savings. IV. Specific Risks of this Fund: 1. Asset allocation risk; 2. Fund investment risk; 3. Risks of investing in Hong Kong-listed securities; 4. Asset-backed security investment risk; 5. Depositary receipt investment risk; 6. STAR Market stock investment risk; 7. Risk of inability to redeem or convert during the minimum holding period, etc. General and specific risks of this fund are detailed in the risk disclosure section of the prospectus. V. The fund manager承诺 (chéngnuò -承诺) to manage and utilize fund assets with honesty,信用 (xìnyòng -信用), diligence, and responsibility, but does not guarantee that the fund will be profitable or provide a minimum return. The fund's past performance and net asset value do not predict its future performance. The performance of other funds managed by the fund manager does not guarantee this fund's performance. Guotai Asset Management Co., Ltd. reminds you of the "caveat emptor" principle in fund investing. After making an investment decision, investment risks arising from the fund's operational status and NAV changes are borne by you. The fund manager, custodian, sales agency, and related institutions do not promise or guarantee fund investment returns. VI. This fund was applied for募集 (mùjí -募集) by Guotai Asset Management Co., Ltd. in accordance with relevant laws and regulations and is registered with the permission of the China Securities Regulatory Commission (CSRC). The Fund Contract, Prospectus, and Key Facts Abstract have been publicly disclosed via the CSRC Fund Electronic Disclosure website and the fund manager's website. CSRC registration does not indicate a substantive judgment or guarantee of the fund's investment value, market prospects, or returns, nor does it indicate that investing in the fund is risk-free.
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