On October 28, the third-quarter reports of funds managed by renowned E Fund manager Zhang Kun were disclosed.

After a challenging second quarter, Zhang Kun achieved a performance turnaround in Q3, with Alibaba and Tencent emerging as the primary contributors. This outperforming quarterly report reaffirmed his commitment to "long-termism."

**Focus on Consumer and Tech Sectors** Currently, Zhang Kun manages four funds: E Fund Blue Chip Select, E Fund Quality Select, E Fund Quality Enterprise Three-Year Holding, and E Fund Asia Select. By the end of Q3 2025, all four funds had outperformed their respective benchmarks, with total assets under management (AUM) reaching approximately RMB 56.544 billion, reflecting a slight increase from the previous quarter.

In terms of performance, E Fund Asia Select surged 39.29% year-to-date, E Fund Quality Enterprise Three-Year Holding rose 18.89%, E Fund Blue Chip Select gained 14.75%, and E Fund Quality Select climbed 15.74%.

Regarding portfolio adjustments, Zhang Kun significantly increased holdings in Focus Media, Yum China, Kweichow Moutai, Wuliangye, and Google compared to the previous quarter. In the largest fund, E Fund Blue Chip Select, Focus Media entered the top ten holdings, replacing SF Holding.

Yum China, Kweichow Moutai, and Wuliangye also saw increased allocations, while other stocks were trimmed. Notably, Tencent and Alibaba-W were reduced by over 20%. Despite their strong Q3 gains—31% and 61%, respectively—the cuts were likely due to regulatory limits on single-stock exposure rather than a loss of confidence.

In the other three funds, JD Health and Focus Media entered E Fund Quality Select’s top ten, replacing SF Holding and Prada. E Fund Quality Enterprise Three-Year Holding saw a notable rise in Yum China but reduced exposure to Tencent, Alibaba-W, and liquor stocks like Kweichow Moutai. Meanwhile, Prada and Google joined E Fund Asia Select’s top ten, replacing ASML and SK Hynix.

Zhang Kun’s shift toward Google may reflect his preference for resilient AI software and services over semiconductor hardware. Prada had previously featured in his top holdings.

**Confidence in China’s Domestic Demand Potential** As usual, Zhang Kun elaborated on his market outlook in the quarterly report. Compared to last year, his conviction in China’s domestic demand has only strengthened.

In Q3 2024, he emphasized policy-driven reversals of economic pessimism and corporate earnings downturns as key to breaking negative cycles. By Q3 2025, his focus deepened to the long-term structural potential of China’s consumer market.

First, he revisited the "Mr. Market" concept, urging investors to resist short-term volatility. He argued that current pessimism overstates near-term challenges without a lasting foundation, as markets eventually reflect intrinsic value.

Second, Zhang Kun remains bullish on China’s consumer growth, expecting it to outpace GDP expansion. His optimism stems from China’s vast, unified domestic market and low household consumption-to-GDP ratio, which offers significant upside.

World Bank data shows China’s per capita GDP at ~$13,000 in 2024—below the global average but poised to rise toward "moderately developed" status by 2035. With consumption’s GDP share among the lowest globally, Zhang Kun projects: "Long-term, China’s consumption growth > China’s GDP growth > global GDP growth."

On deflationary pressures, he reiterated minimal concern, citing policymakers’ proven tools and precedents from other economies.

**Conclusion** Amid 2025’s exuberance for new consumer trends and tech stocks—with the Nasdaq up 22% and hitting record highs—Zhang Kun remained steadfast: "Market trends are unpredictable, but we’ll stick to our style." His discipline in ignoring short-term hype underscores his investment philosophy.