The mutual fund market in 2025 has experienced accelerated growth, with the ETF investment boom continuing while multi-asset allocation has emerged as another significant trend. A report from China Securities Co., Ltd. indicates that a volatile but upward-trending equity market has driven a recovery in the scale of active equity funds; however, the shift towards passive investing is accelerating. Concurrently, fixed-income plus products have expanded noticeably in the low-interest-rate environment, presenting a more diversified growth landscape for the industry.

The overall scale of equity funds has recovered, yet growth remains predominantly led by passive index funds. By the end of the third quarter of 2025, the scale of passive index funds had increased by over 1.1 trillion yuan, with ETF assets under management surpassing 5 trillion yuan. Although active equity funds have seen a significant recovery in alpha generation, their scale growth has been primarily driven by net asset value appreciation, as overall fund share units have still declined. This reflects a tendency among investors to take profits after the market rebound.

Fixed-income products have shown clear divergence. With the bond market weakening in 2025, the scale of medium-to-long-term pure bond funds decreased by over 600 billion yuan, while short-term pure bond funds saw a reduction of nearly 250 billion yuan. In stark contrast, fixed-income plus funds seized a development opportunity, with secondary tier bond funds growing by 625 billion yuan. Amid persistently low yields on traditional fixed-income assets in the low-rate environment, increasing allocations to equity assets has become a market consensus. Multi-asset allocation strategies offer investors a "seeking progress while maintaining stability" solution.

The primary market for Fund of Funds (FOFs) has warmed significantly, with over 80 new FOFs launched in 2025, achieving a combined issuance scale of 80 billion yuan. The investment scope of these new FOFs increasingly reflects multi-asset allocation characteristics, incorporating not just equity and fixed-income funds but also commodity funds, QDII funds, Hong Kong mutual recognition funds, and public REITs, among other categories.

Active Equity: Diverse Paths to Breakthrough The China Securities report analyzed the scale growth of active equity funds—including ordinary stock funds, equity-biased hybrid funds, and high-equity-ratio flexible allocation/balanced hybrid funds with an average position >60% over the past year—managed by various fund companies in 2025. Yongying Fund, Zhongou Fund, Yifangda Fund, and Fuguo Fund each saw their active equity fund scales grow by over 35 billion yuan for the year.

Yongying Fund achieved a breakthrough in active equity scale through its "Zhi Xuan Series" products, with scale growth exceeding 76 billion yuan in 2025, a more than four-fold increase from the end of the previous year. The series comprises 16 products, which contributed 57.6 billion yuan in scale growth, accounting for 66% of the firm's entire active equity product line.

Yongying Fund's success is largely attributed to its forward-looking布局 in niche sectors. Most Zhi Xuan Series products were established between the second half of 2022 and the first half of 2023, representing a contrarian布局 during a downturn in active equity funds into themes aligned with the development of new productive forces, such as robotics, cloud computing, semiconductors, domestic computing power, and innovative drugs. These products generate alpha through concentrated investments and active management, with their tool-based positioning meeting investor demand for targeted sector exposure. For instance, Yongying Technology Zhi Xuan surged 192% in 2025, while Yongying Advanced Manufacturing Zhi Xuan delivered a 70.07% return.

The scale growth for Zhongou Fund and Yifangda Fund was primarily driven by technology-focused, high-volatility products, alongside continued inflows into top-performing dividend funds. Zhongou Fund's active equity scale grew by over 70.5 billion yuan in 2025, a 42.44% increase. Products managed by fund managers specializing in the TMT sector, such as Feng Ludan and Du Houliang, achieved returns exceeding 100% in 2025, driving significant scale growth through both NAV appreciation and net inflows. Yifangda Fund's active equity scale increased by over 40.3 billion yuan, with products managed by technology and growth-style managers like Liu Jianwei, Zheng Xi, and Ouyang Liangqi also posting gains above 100% for the year.

Newly launched variable fee products from both firms also garnered significant market attention. Zhongou Core Zhi Xuan raised over 2.1 billion yuan, and Yifangda Value Return raised over 2 billion yuan, both featuring a three-tier fee structure of 1.2% (base rate), 1.5% (increased rate), and 0.6% (decreased rate).

Fuguo Fund's overall active equity investment style leans towards balance, and the addition of Fan Yan in 2024 brought noticeable scale increments. Fuguo Stable Growth increased its scale by 7 billion yuan in 2025, and the newly launched Fuguo Balanced Investment raised nearly 2 billion yuan. Building on this balanced style, sector-focused managers in technology and healthcare achieved breakthroughs, with Fuguo Emerging Industries, Fuguo Small and Mid-Cap Selection, and Fuguo Innovation Technology each increasing their scale by over 3 billion yuan during the year. Fuguo Fund's Hong Kong stock investment team has an excellent historical track record, with the scale of Fuguo Shanghai-Hong Kong Shenzhen Performance Drive growing from 4.4 billion yuan at the end of 2024 to 7.9 billion yuan by the end of Q3 2025.

Fixed-Income Plus Funds: Institutional Favor for Steady Strategies The report stated that fixed-income plus funds experienced notable scale growth. Using a sample that includes flexible allocation funds with low-to-medium equity exposure, bond-biased hybrid funds, secondary tier bond funds, primary tier bond funds, and convertible bond funds, the report analyzed the 2025 scale growth of fixed-income plus funds across managers. Invesco Great Wall Fund led in terms of scale growth.

By the end of Q3, the firm's fixed-income plus fund scale had grown by over 110 billion yuan in 2025, contributing 78% to the company's non-monetary fund scale growth. Its fixed-income plus product line features diverse strategies covering various risk-return profiles, with excellent long-term risk-adjusted returns, making it popular among institutional investors.

Fixed-income plus funds that increased their scale by over 10 billion yuan in 2025 were predominantly secondary tier bond funds, most of which ranked relatively high in peer performance over the past two years. Yongying Stable Enhancement, Invesco Great Wall Jing Yi Feng Li, Fuguo Optimization Enhancement, and Penghua Dual Bond Plus Equity, which have relatively high equity allocations, achieved returns above 15% in 2025. Most of these funds have significant holdings in the technology, cyclical, and manufacturing sectors, generally偏向 large-cap balanced and large-cap growth styles, reflecting the market's relative preference for growth and high-potential sectors.

Simultaneously, the leading funds in scale growth predominantly feature high institutional investor ownership, averaging close to 70%. Yongying Stable Enhancement, Zhongou Feng Li, and Invesco Great Wall Jing Yi Feng Li all had institutional ownership exceeding 90% according to their 2025 interim reports. Funds with significant scale growth that are primarily held by retail investors include Ruiyuan Stable Enhancement 30-Day Holding, Bosera Stable Return Enhancement, Southern Jin Xiang Stable Addition, and ChinaAMC Stable Enjoyment Enhancement 6-Month Rolling. These products generally maintain relatively lower equity allocation centers, around 10%-15%, for a more conservative profile.

ETF Market: Concentration at the Top and Product Innovation The report indicated that the competitive landscape of the ETF market shows clear concentration among top players. ChinaAMC, Yifangda Fund, and Huatai-PineBridge Fund each hold a market share exceeding 10%, with ETF scales all above 600 billion yuan. ChinaAMC's ETF scale reached 941.686 billion yuan, accounting for 16.52% of the market; Yifangda Fund's ETF scale reached 872.963 billion yuan, representing a 15.32% market share.

The primary contributors to scale growth in 2025 included gold ETFs, mainstream broad-based index ETFs, and Hong Kong stock ETFs. Huaan Gold ETF's scale increased by nearly 66 billion yuan, while Bosera Gold ETF's scale grew by over 26 billion yuan. Among equity ETFs, mainstream broad-based ETFs heavily held by long-term institutional investors like Central Huijin continued to see scale increases: Huatai-PineBridge CSI 300 ETF grew by 64.2 billion yuan, ChinaAMC CSI 300 ETF by 63.9 billion yuan, and Yifangda CSI 300 ETF by 52.5 billion yuan.

In the cross-border ETF space, Hong Kong stock ETFs saw significant scale expansion. Fuguo CSI Hong Kong Stock Connect Internet ETF increased by over 59.1 billion yuan, while ICBC CSOP Hong Kong Stock Connect Technology ETF and ChinaAMC Hang Seng Tech ETF also registered substantial growth. GF CSI Hong Kong Stock Connect Non-Bank Financial Theme ETF's scale expanded by over 25.8 billion yuan.

Breaking down by sub-category, large-cap broad-based ETFs saw the highest scale growth, exceeding 200 billion yuan. Sector-themed ETFs also experienced noticeable growth, primarily in TMT and manufacturing sectors, driven by trends in AI and robotics. Among style and strategy ETFs, low-volatility dividend and free cash flow strategies, being relatively steady long-term approaches, attracted some capital inflows, with free cash flow ETFs growing by 25.45 billion yuan.

Newly launched benchmark market-maker credit bond ETFs and Sci-Tech Innovation Board bond ETFs garnered considerable attention during the year, with single-product fundraising sizes generally around 3 billion yuan. Based on recently filed ETF applications from various managers, the focus areas for future布局 mainly include non-ferrous metals, Sci-Tech Innovation Board and ChiNext board indices, dividend quality, and Hong Kong-listed technology stocks.