Public FOFs (Fund of Funds), often referred to as "professional fund selectors," have seen their market attention continue to rise in 2025. The latest disclosure of public fund fourth-quarter reports for 2025 provides direct evidence for this market trend.
Overall, the primary issuance market for public FOFs was highly active in the fourth quarter of 2025, with the number of new funds and their scale increasing significantly compared to the previous quarter. Simultaneously, the number of fund management companies entering the public FOF arena continues to grow. In terms of holdings, pure bond funds constitute the largest fund type by scale held by public FOFs.
The primary issuance market exhibited high activity. The scale of the public FOF market maintained an upward trend in 2025, with the growth momentum becoming more pronounced in the fourth quarter. Data from Tianxiang Investment Consulting shows that by the end of 2025, there were a total of 550 public FOFs (categorized into regular FOFs and pension target FOFs) in the entire market (combining different share classes), with a total management scale of 218.901 billion yuan, representing an increase of 49 funds and 31.655 billion yuan respectively compared to the end of the third quarter of 2025.
The enthusiasm of public fund institutions for launching new products was particularly strong in the fourth quarter of 2025. A total of 43 new public FOFs were issued market-wide, raising 45.064 billion yuan, increases of 24 funds and 38.532 billion yuan respectively compared to the third quarter of 2025. Among these, regular FOFs accounted for over 90% of both the number and scale of new products.
Zhu Runkang, Public Fund Product Manager at Shenzhen Qianhai Paipaiwang Fund Sales Co., Ltd., stated that three key factors jointly contributed to the activity in the public FOF new issuance market: first, market environment catalysts, where against a backdrop of low interest rates and increased market volatility, the appeal of traditional wealth management products has diminished, creating an urgent need for stable alternative channels; the long-term stable appreciation characteristics of public FOFs,凭借 their "double diversification"配置 advantage, are widely recognized. Second, product capability upgrades, as the investment research systems for public FOFs continue to optimize and multi-asset allocation capabilities improve, making the products' risk-return profiles more competitive and aligning with investor demand for high-quality, stable products. Third, enhanced investor awareness, as investors' professional wealth management knowledge grows, their acceptance of professional allocation tools like public FOFs continues to increase.
Simultaneously, the number of fund management companies entering the public FOF space continues to rise. By the end of 2025, a total of 7 fund managers had launched regular FOFs, and 65 had launched pension target FOFs, increases of 3 and 1 respectively compared to the end of the third quarter of 2025. However, the market concentration for public FOFs remains high currently, with the top ten managers by FOF scale holding a combined market share of 60.31%. This landscape may change as more managers enter the field.
Focus on Bond Fund Allocation. Public FOFs are characterized by their multi-asset allocation approach. Looking at their holdings, bond funds are a primary allocation focus. Data from Tianxiang Investment Consulting shows that by the end of 2025, public FOFs held the largest scale in pure bond funds, with a total holding value reaching 56.522 billion yuan, accounting for 45.22% of their holdings; holdings of index bond funds ranked second, with a total scale of 17.207 billion yuan, representing 13.77%. Furthermore, other fund types where public FOF holdings exceeded 5% of their total included hybrid bond funds and equity-biased hybrid funds.
Discussing the rationale behind the high allocation to pure bond funds, Zhu Runkang identified three key reasons: "building a return foundation," "leveraging asset allocation effectiveness," and "matching long-term appreciation goals." In a market environment characterized by low interest rates and high volatility, pure bond funds offer low volatility and can provide a base return for the FOF portfolio, effectively hedging risks from equity assets. Concurrently, bond funds are a crucial tool for multi-asset allocation; public FOFs can optimize portfolio structure and smooth the net value curve across different market conditions by flexibly adjusting the equity-bond ratio. Additionally, the investment objectives of pure bond funds align highly with the long-term wealth accumulation goals pursued by public FOFs, making them an ideal cornerstone for building investment portfolios.
In recent years, public FOFs, acting as "professional fund selectors," have continuously diversified their allocation dimensions, incorporating public REITs (Real Estate Investment Trusts), commodity funds, QDII (Qualified Domestic Institutional Investor) funds, and others into their investment scope.
Concurrently, public FOFs have also made continuous breakthroughs in product innovation. According to Zhu Runkang, public FOF product structures are evolving rapidly, with innovations such as FOF-LOFs (where LOF stands for Listed Open-Ended Fund), QDII-FOF-LOFs, and ETF-FOFs being introduced. Among these, ETF-FOFs have garnered significant market attention due to features like low fees and convenient portfolio adjustments. Furthermore, the product design of public FOFs is increasingly tailored to market demands; addressing investor concerns about short-term speculation, public fund institutions have launched holding-period FOFs, which use mechanism design to encourage long-term investment and optimize the investor holding experience.
On January 26th, the Huafu Chunxin Wenjian 3-Month Holding Mixed (ETF-FOF) began its issuance. A representative from Huafu Fund, when interviewed, stated that ETF-FOFs focus on building investment portfolios using passive index funds, perfectly integrating the dual core advantages of ETFs and FOFs—they inherit the flexible, efficient, and convenient trading experience of ETFs while leveraging the professional investment research capabilities of FOFs to achieve scientific diversified allocation. This is akin to providing investors with a one-stop solution for bundling quality ETFs of various styles, helping to resolve investment pain points like "difficulty in selecting funds" and "difficulty in allocating to funds."