August has seen a weakening in the overall supply of new public mutual fund launches, driven by market volatility in July. As of August 11, Wind data shows only 23 new funds were established this month, with total offering shares of approximately 6.366 billion units, less than one-tenth of July's total. In terms of product structure, the previously hot ETF launches have slowed, while the popularity of risk-averse products like bond FOFs and "fixed-income plus" strategies continues. From an industry perspective, several fund managers are using thematic sponsor-initiated funds to quickly position in niche sectors, with the healthcare sector, which has undergone significant corrections and is at low valuations, receiving focused attention. Looking ahead, institutions generally believe that positive factors in the A-share market are accumulating, and market style may shift from a single tech-focused extreme to a more balanced allocation across multiple sectors.

The market turbulence since July is impacting the fund launch market. Wind data reveals that, using the fund establishment date as a standard, only 23 new funds were established in August as of August 11, with total offering shares around 6.366 billion units. Notably, this offering share is less than one-tenth of July's full-month total of 77.649 billion units. Meanwhile, July was not the peak launch period this year, as new fund sizes in both May and June exceeded 100 billion units. In terms of product structure, newly established equity funds account for 3.229 billion units, or 50.72% of the total, making them the largest product type in August. Hybrid funds accounted for 1.938 billion units, or about 30.44%. For instance, KINTOR PHARMA-B was established on August 4 with an initial offering size exceeding 1.1 billion yuan. Other products, such as Boshi Wenrui Gain 6-Month Holding, GF Jingxin Select, and E Fund SSE STAR Market Chip Design Theme ETF Link, also raised over 600 million yuan each.

Worth noting is that the previously red-hot ETF sector has significantly cooled in August. Data shows that, although a third of August has passed, only 8 new ETFs were established this month, a slowdown in launch pace compared to July's 46 and June's 61. However, some fund companies have filed for niche ETFs such as ChiNext computing power and fintech. Meanwhile, risk-averse and multi-asset allocation products like bond FOFs and "fixed-income plus" strategies have continued their July launch momentum. Industry insiders suggest that in the current market environment, "fixed-income plus" products, with their fixed-income foundation and small equity enhancement, fit well with residents' "idle money wealth management" allocation needs.

Sponsor-initiated funds, which require shareholder capital, company capital, or contributions from senior management or fund managers to subscribe at least 10 million yuan during fundraising, are often viewed by public fund managers as a key tool for "positioning" in hot sectors. Amid the overall slowdown in active equity fund launches, sponsor-initiated funds remain active, reflecting current fund manager interests. Wind data shows that among the 111 new products launched in August, 30 are sponsor-initiated, coming from 23 fund companies. These 30 products are primarily thematic industry funds, but with a diversified investment direction covering sectors like healthcare, semiconductors, automobiles, and cyclical resources. Notably, the number of healthcare sector products has increased significantly compared to before. This contrasts sharply with the previous pattern where tech-themed products dominated launches. Industry analysis suggests that the market style is shifting from a single tech extreme to a more balanced allocation across multiple sectors. Leveraging the low barrier of sponsor-initiated funds, fund managers are accelerating positions in sectors that have undergone sufficient corrections and returned to reasonable valuation ranges. The healthcare sector, due to its prolonged adjustment period and resilient fundamentals, has become a key focus for contrarian investments.

In terms of market performance, the healthcare sector has seen a significant valuation recovery rally since hitting a bottom in June. As of now, several innovative drug ETFs have rebounded over 20% from their year-to-date lows, attracting over 10 billion yuan in total inflows. Additionally, some healthcare-themed active equity funds have posted gains of over 30%. Industry insiders generally believe that with the tech sector experiencing high volatility, the healthcare sector, with low valuations and positioning, is attracting increasing capital attention.

Looking ahead, institutional strategies broadly suggest that positive factors in the A-share market are steadily accumulating. Despite a sharp correction in July, deleveraging is nearing its end, and the policy bottom is clear. Valuations for some sectors have entered the long-term bottom range. Supported by positive domestic and external macro factors, the medium-to-long-term investment value of A-shares is becoming prominent. "Given that the overall leverage ratio of the A-share market is controllable and margin balances have dropped rapidly recently, the deleveraging process in the short term may be nearing its end," said Meng Lei, a Chinese stock strategy analyst at UBS Securities. He noted that positive factors are accumulating, including repeated regulatory statements to maintain stable market operations, state-owned capital companies announcing A-share purchases, rapid increases in broad-based ETF trading volumes with sustained net inflows, major Chinese quantitative hedge funds making significant self-purchases amid market pullbacks, and multiple insurance companies declaring their commitment to market stability. Furthermore, several listed companies are actively buying back shares. Overseas, a global stock market rebound is boosting risk appetite among global investors. GF Fund suggests that the AI theme remains noteworthy, but after recent volatility, it likely won't be the sole market theme over the next 1-2 quarters, and market trading structure may become more balanced. Therefore, attention could turn to potential beneficiaries of AI spillover effects, with sectors screened for earnings upgrades, low relative valuations, and uncrowded positions including innovative drugs, power equipment, chemicals, non-ferrous metals, and non-bank/banks.

Regarding the healthcare sector, represented by innovative drugs, structural opportunities are recognized by many institutions, but a full reversal may require overseas commercialization scale-up. He Li, General Manager of Zhiyu Zhishan Investment, said the near-term momentum in innovative drugs is partly driven by sentiment and capital rotation, but over the medium-to-long term, it's a strategic direction worth sustained attention. The domestic innovative drug industry is gradually moving from "follow-on innovation" to more globally competitive original innovation, with some companies gaining international validation in target selection, clinical development, and R&D efficiency, and overseas licensing deals remaining active. After valuation digestion since October last year, many innovative drug companies have returned to reasonable or even low valuation levels, with improving fundamentals and strong commercialization capabilities from leading companies, making them a key long-term focus. Li Tao, Fund Manager of Neuberger Berman China Healthcare Equity Fund, believes the recent healthcare rally is not a short-term rebound but a trend repair supported by industry fundamentals. Boshi Fund Manager Chen Ximing also sees potential in innovative drugs and their supply chain in the second half of the year, citing high industry fundamentals and strong performance of the US biotech stock index, with innovative drugs absorbing some capital flowing out of the AI sector.