The mutual fund industry has reached another significant milestone. According to the latest data released by the Asset Management Association of China on March 25th, as of the end of February 2026, the total assets under management of China's mutual funds had exceeded 38 trillion yuan for the first time, reaching 38.61 trillion yuan. This marks the 11th consecutive month that mutual fund assets have hit a new record high.

Within just one month, mutual fund assets grew by over 800 billion yuan, a month-on-month increase of 2.2%.

However, behind this impressive performance, structural shifts in capital flows are undergoing profound changes. On one hand, stable products continue to attract capital, with fixed-income funds and "fixed-income plus" funds leading the growth. On the other hand, equity funds have seen a rare decline in assets. Additionally, the assets of Fund of Funds (FOF) grew by 12.28% month-on-month, far outpacing other fund types and continuing to lead the pack.

**Breaking the 38 Trillion Yuan Barrier**

The latest data from the Asset Management Association of China reveals that, as of the end of February 2026, there were 165 public fund management institutions in China, including 150 fund management companies and 15 asset management institutions qualified to manage public funds. The combined net asset value of public funds managed by these institutions reached 38.61 trillion yuan, surpassing the 38 trillion yuan mark for the first time.

Since the end of April 2025, the assets under management of public funds have set new historical records for 11 consecutive months.

Data shows that both the total shares and assets of public funds grew by more than 2% in February. By the end of February 2026, the total shares of public funds reached 32.77 trillion, an increase of 862.027 billion shares from the end of January, up 2.7% month-on-month. Assets reached 38.61 trillion yuan, increasing by 839.778 billion yuan in a single month, a month-on-month growth of 2.22%.

Notably, shares of all fund categories increased in February. FOF led with a 13.02% month-on-month growth rate, followed by QDII funds with a 7.95% increase.

Asset growth, however, showed divergence. FOF assets surged by 12.28% month-on-month, far ahead of others. Money market funds grew by 3.79%, while hybrid funds and bond funds increased by 2.33% and 2.06%, respectively. QDII funds saw a modest 0.39% growth. In contrast, equity funds and other funds saw their assets shrink by 1.38% and 0.27% month-on-month, respectively.

Looking at a longer timeframe, the growth trajectory of public funds is remarkable. At the end of 2015, the total assets of public funds were only 8.4 trillion yuan. A decade later, this figure has grown 3.6 times.

This growth is underpinned by three clear trends: first, against the backdrop of the "housing is for living, not for speculation" policy, household wealth is shifting from the property market to financial assets; second, the stock market recovery has enhanced the profitability of fund investments; third, following new asset management regulations, the advantages of net-value products have become increasingly apparent.

Huaxin Securities predicts potential incremental funds for public funds in 2026 to be approximately 877.2 billion yuan. If the recent growth rate of 10% to 15% is maintained, the era of 40 trillion yuan in public fund assets may be just around the corner.

**Stability First: Money Market and Bond Funds as Growth Drivers**

Which funds contributed the most to the over 800 billion yuan increase? The answer lies in money market funds and bond funds.

Data indicates that money market fund assets surged by 579.511 billion yuan in February alone, becoming the absolute main driver of the overall asset increase. Meanwhile, bond fund assets also grew by 216.734 billion yuan. Together, they contributed nearly 800 billion yuan to the increment, acting as the "twin stars" of this round of growth, with month-on-month increases of 3.79% and 2.06%, respectively.

A fund manager pointed out that this trend is a continuation of the "deposit relocation" wave. In a low-interest-rate environment, the appeal of traditional savings has diminished, and household wealth allocation is shifting from "saving in banks" to "investing in funds." Among these, money market funds and bond funds, with their stable safety advantages, have become the "reservoir" for relocating deposits.

Zhu Yanqiong, a fixed-income investment fund manager at Taiping Fund, also believes that declining deposit rates and volatility in the equity market have highlighted the cost-effectiveness of money market funds as "safe havens."

It is noteworthy that even though money market fund yields have generally fallen to around 1%, their assets continue to grow. This reflects that, in a volatile market, investors prioritize the safety and liquidity of their funds over chasing higher yields.

According to channel feedback, the increase in bond fund assets in February mainly came from retail subscriptions to primary bond funds, secondary bond funds, and other "fixed-income plus" products. With limited upside for pure bond yields, "fixed-income plus" products, leveraging the benefits of mixed equity and bond allocations, attracted incremental funds, becoming the primary driver of bond fund asset growth.

Market analysis suggests that after A-shares reached short-term highs in February, continued market volatility led some investors to cash in profits or shift to defensive strategies, thereby promoting the growth of money market and bond fund assets.

**Equity Funds Shrink "Against the Trend": Who is Exiting?**

In stark contrast to the popularity of fixed-income products, equity funds performed disappointingly in February. Despite gains in the Shanghai and Shenzhen stock indices (the Shanghai Composite Index rose 1.09%, and the Shenzhen Component Index rose 2.03%), equity fund assets decreased against the trend by 79.035 billion yuan, a drop of 1.38%, bringing their latest size to 5.63 trillion yuan. Hybrid funds remained stable, with assets increasing slightly by 93.341 billion yuan, up 2.33%, reaching 4.10 trillion yuan.

Why did equity fund assets shrink while the indices rose?

Guan Xiaomin noted, "After a rapid stock market rise at the beginning of 2026, starting mid-January, national team funds began selling broad-based index ETFs, leading to a subsequent reduction in the size of equity ETFs."

Data from Geshang Funds shows that by the end of February, the assets of equity ETFs had decreased from 3.22 trillion yuan at the end of January to 3.16 trillion yuan, with a net outflow of 63.504 billion yuan.

Specifically, the CSI 300 ETF saw a net outflow of 21.94 billion yuan, the CSI A500 ETF a net outflow of 21.18 billion yuan, and the CSI 500 ETF a net outflow of 20.09 billion yuan. The continuous outflow of large funds from these broad-based index ETFs, which represent large-cap blue chips and core assets, directly led to the overall decline in equity fund assets.

Meanwhile, hybrid fund assets have grown for three consecutive months, indicating that the phenomenon of investors redeeming active equity funds upon breaking even has largely ended, and more capital is flowing into the active equity market. Channel sources believe that "fixed-income plus" funds within this category attracted significant capital.

**FOF Emerges as a Dark Horse: A Key Tool for Low-Volatility Era Allocation**

Besides money market and bond funds, FOF also performed remarkably in February, with assets increasing by 34.536 billion yuan in a single month, a month-on-month surge of 12.28%, making it one of the fastest-growing categories. FOF has been the fund type with the largest month-on-month asset increase for three consecutive months.

The popularity of FOF is reflected not only in existing assets but also in new fund issuances. Using the fund establishment date as the statistical benchmark, Wind data shows that FOF issuance reached 26 billion yuan in February. Over a longer period, as of March 25th, FOF issuance within the year totaled 67.4 billion yuan, with several products achieving establishment sizes exceeding 5 billion yuan, frequently appearing as "hit products." Since October 2025, the issuance scale of new FOF funds has remained above 10 billion yuan for five consecutive months.

Industry insiders believe the hot issuance of FOF is mainly due to its high compatibility with the current customer structure of bank retail channels. Against the backdrop of approximately 75 trillion yuan in time deposits maturing this year, customer reinvestment needs are prominent. FOF, with its diversified "fixed-income plus" allocation model, offers returns exceeding deposit rates while maintaining liquidity, making it a core recommendation for wealth managers.

Analysts point out that the strategic shift in bank channels is a key force behind this round of FOF expansion. After experiencing the impact of net value drawdowns in previous equity funds and thematic products, banks have begun re-evaluating their product layouts, shifting their strategic focus from simply "selling single products" to "selling asset allocation solutions." Leading banks are no longer satisfied with mere distribution but are collaborating with fund companies to create exclusive FOF brand plans. From China Merchants Bank's "TREE Changying Plan" to China Construction Bank's "Longying Plan," and Bank of China's "Huitou Plan," banks are building systematic, branded FOF product matrices through deep cooperation with fund companies, strongly driving the rise of FOF funds.