By 2026, the growth momentum of public fund FOFs continues. According to Wind data, as of March 11, 2026, the total scale of FOFs in the market reached 295.843 billion yuan, an increase of 52.003 billion yuan since the beginning of the year, establishing itself as a significant growth driver for the industry.
Against the backdrop of declining interest rates, intensified asset rotation, and lower wealth management yields, FOFs have seemingly shed their role as a "supplementary tool" and moved into the spotlight as the "main protagonist in the asset allocation narrative."
**From 1.0 to 2.0: Proving Worth Through Challenges** The industry began in October 2017 with the launch of the first six public fund FOFs. Over the next two years, spurred by the gradual introduction of pension target funds, the sector completed its initial layout benefiting from policy incentives. From 2020 to 2021, buoyed by a recovery in the equity market, FOFs experienced their first major growth phase, with the total scale soaring from under 50 billion yuan to over 200 billion yuan.
After the establishment of the personal pension system in 2022, the industry encountered new opportunities with the Y-share class, yet faced an adjustment period from late 2022 to the end of 2024 due to market volatility, performance gaps, and investor adaptation challenges.
A turnaround emerged again in 2025. As the equity market recovery coincided with demand for multi-asset allocation in a low-interest-rate environment, and with concerted efforts from distribution channels, public fund FOFs entered a second expansion cycle. By year-end, the number of products surged to 547, with the total scale climbing to 244.1 billion yuan, representing year-on-year increases of 134% and 231% respectively, setting new historical records.
Eight years of fluctuations have seen the industry mature. The trajectory of its scale charts the evolution of public fund FOFs from a niche offering to a mainstream choice. As market tides ebb and flow, the enduring value of cycle-resilient products is ultimately validated over time.
**FOF's "Threefold Upgrade" and the ChinaAMC Approach** In this evolution from FOF 1.0 to 2.0, three core upgrades are observable. China Asset Management Co., Ltd.'s (ChinaAMC) exploration and practice are representative of this industry leap.
**First Upgrade: From "Fund Selection Tool" to "Asset Allocation Solution"** Early public fund FOFs were often perceived as "fund supermarkets," with some products essentially being assemblages of multiple funds, still heavily concentrated in stocks and bonds. The occurrence of downturns in both stocks and bonds, along with structural bear markets in recent years, made investors realize that simply "buying more funds" does not achieve genuine risk diversification.
As the public fund market expanded, offering diverse instruments like gold, commodities, and overseas equities, it provided a foundation for FOFs to break free from traditional stock-bond constraints. Consequently, FOFs gradually evolved from being "fund selection tools" into "one-stop asset allocation solutions."
ChinaAMC recognized early that the core of FOFs lies not in "picking good funds" but in "executing sound allocation." Based on local market characteristics, they developed a "multi-asset, multi-strategy, all-weather" asset allocation methodology: * **Multi-asset:** Traditional domestic portfolios, limited by scope, could only allocate among stocks, bonds, and convertibles, which proved challenging in recent market conditions. Increasing exposure to low-correlation assets can significantly reduce drawdowns and achieve a higher risk-adjusted return for the portfolio. * **Multi-strategy:** Addressing the complexity of numerous assets, intricate correlations, and fast-changing markets, ChinaAMC adopts a "risk factor" perspective. They decompose asset price fluctuations into core factors like growth, inflation, and liquidity, using quantitative portfolio management to precisely control the portfolio's risk exposure to different factors. * **All-weather:** Drawing on risk parity concepts, they design sub-strategies tailored to different economic cycles (recovery, overheating, stagflation, recession) and weight them using risk parity methods. This aims to maintain relatively stable volatility across various macroeconomic environments, pursuing a higher Sharpe ratio and lower drawdowns.
Building on this strategic asset allocation (SAA) framework, ChinaAMC further introduced a tactical MVPS system (Macro, Valuation, Policy, Sentiment) at the tactical asset allocation (TAA) level. This integrates "win rate" and "odds" into a unified decision-making framework for dynamically assessing and adjusting different assets, making allocation decisions more systematic and traceable.
**Second Upgrade: From "Return-Oriented" to "Risk Management"** Investor demands vary across different assets and products. Equity investors typically have higher risk appetites, seeking return potential; bond investors prioritize stability, often willing to sacrifice some return for lower volatility.
For public fund FOF products, investors generally seek a balance between return and risk. A simple yet crucial mathematical fact is: a 50% loss requires a 100% gain just to break even. In long-term investing, effectively controlling volatility is vital for sustained portfolio appreciation. A product that rises 50% then falls 40% might seem "exciting," but from an absolute return and drawdown perspective, the experience is often far inferior to a steady "6% to 8% per year."
ChinaAMC believes the benchmark for defining FOF products should shift from merely chasing "return rates" to pursuing the "Sharpe ratio." In a low-interest-rate era, single assets often face the dilemma of "high returns accompanied by high volatility," struggling to meet investor demands for stable appreciation. The core value of FOFs lies in utilizing the diversification effect of major asset allocation to provide long-term, stable returns with a high Sharpe ratio, under the premise of strictly controlling volatility and drawdowns, thereby tangibly increasing the probability of client profitability.
To embed this philosophy throughout the process, ChinaAMC established a full-cycle quality management system. This system manifests as "ex-ante framing, in-process monitoring, ex-post evaluation": defining risk exposure upfront, monitoring deviations in real-time during management, and evaluating risk-adjusted returns afterwards, ensuring comprehensive risk control.
Notably, ChinaAMC's risk control is not isolated but deeply integrated with the company's overall investment research system. Leveraging the "Multi-Asset All-Weather Investment Framework" developed by ChinaAMC, the FOF team can manage risk more systematically. A key pillar supporting this framework is the distinctive MVPS investment system (Macro, Valuation, Policy, Sentiment), giving ChinaAMC FOFs an inherent advantage in risk anticipation and response: * Analyzing the fundamentals of major assets by understanding economic cycle fluctuations through the macro dimension. * Assessing whether market prices reflect fundamental information through the valuation dimension, making corresponding adjustments. * Capturing the impact of macro policy direction on major asset performance through the policy dimension. * Evaluating portfolio structure and investor sentiment through the sentiment dimension, cautiously participating in overly crowded trades.
This multi-dimensional, comprehensive system support builds robust "risk firewalls" for the portfolio.
**Third Upgrade: Rebuilding Competitiveness with Indexed Beta** Analysis indicates that Beta allocation is one of the most significant competitive advantages of FOF products compared to other public funds. On one hand, combining assets with different risk-return characteristics allows for "customizing" portfolios for investors with varying risk preferences, meeting diverse and refined needs. On the other hand, because returns stem from multiple low-correlation Betas, performance stability is inherently higher.
In mature markets, as pricing efficiency improves, the difficulty and cost of obtaining stable Alpha increase, making Beta allocation increasingly important. Data shows that in the US market, for instance, the proportion of passive index sub-funds within ordinary FOFs has consistently risen over the past two decades, reaching 70% by the first half of 2025.
Although China's public fund FOFs started later, the "indexification" trend is already evident. According to Wind data, by the end of June 2025, the scale of ETF holdings within public fund FOFs exceeded 30 billion yuan, with the corresponding proportion rising significantly to 18.2% compared to previous years.
As a pioneer and leader in China's ETF arena, ChinaAMC holds a natural advantage in this wave of public FOFs increasing ETF allocations. By the end of 2025, ChinaAMC's equity ETF AUM exceeded 900 billion yuan, ranking first in the industry for 20 consecutive years in terms of average annual scale, with over 100 ETF funds. They have built a comprehensive product matrix covering broad-based, sector, thematic, and cross-border areas, providing FOFs with abundant, low-cost underlying allocation tools.
**Practical Validation: The "Allocation Dividend" of Bond-Biased FOFs** The performance of bond-biased hybrid FOFs in 5 outperformed that of狭义"fixed-income plus" funds, validating the effectiveness of the FOF strategy. On one hand, benefiting from the broader investment scope of public fund FOFs (e.g., enhancing portfolio returns through gold ETFs), bond-biased hybrid FOFs achieved a median return of 6.06% in 2025, outperforming other "fixed-income plus" funds (secondary tier bond funds at 4.65%, bond-biased hybrid funds at 5.49%, etc.).
On the other hand, the diversification effect of public fund FOFs also contributed to drawdown control. In 2025, the median maximum drawdown for bond-biased hybrid FOFs was -2.29%, better than the -2.57% for bond-biased hybrid funds, though slightly weaker than the -1.90% for secondary tier bond funds.
Against the backdrop of bond-biased FOFs becoming an industry mainstay, ChinaAMC has corresponding布局, delivering a favorable investment experience characterized by excellent drawdown control. * ChinaAMC Jujia Preferred Three-Month Holding A (FOF), since its inception on December 19, 2023, has achieved an annualized return of 5.84% with a maximum drawdown of -2.75%. * ChinaAMC Ju'an Preferred Three-Month Holding A (FOF), since its inception on March 12, 2024, has achieved an annualized return of 3.45% with a maximum drawdown of -0.98%.
**Summary: From "Niche Choice" to "Core Allocation," the evolution of public fund FOFs reflects investors' growing emphasis on the value of asset allocation. In this cross-cycle transformation, ChinaAMC, anchored by its systematic investment research capabilities, translates complex allocation logic into a more reassuring holding experience, striving to find that long-term, certain answer for investors in an uncertain market. This is not just a product upgrade but a steadfast adherence to the original intent of "managing money on behalf of clients." When short-term market noise subsides, only products with genuine allocation value can travel steadily and far.