Public funds will significantly increase their allocation of A-shares assets by 2025.

Reprinted from: Securities Daily

Staff Reporter Wang Ning

Public fund product 2025 annual report disclosure concludes, asset allocation structure revealed.

Benefiting from the steady development of China’s capital market in 2025, the net asset value of public funds continued to rise, with equity funds experiencing rapid growth. Data shows that by the end of 2025, public funds held stocks valued at 9.03 trillion yuan, an increase of 2.26 trillion yuan from 6.77 trillion yuan at the end of 2024, a growth rate of 33.38%. Among them, the allocation of equity funds to A-shares showed a clear upward trend, rising from 5.89 trillion yuan at the end of 2024 to 7.48 trillion yuan at the end of 2025, an increase of 26.99%. The scale of public fund allocation to A-shares further increased, reflecting strengthened confidence in the valuation recovery of China’s capital market.

In terms of bond funds, data shows that by the end of 2025, public funds held bonds valued at a total of 21.11 trillion yuan, accounting for 53.44% of total assets; an increase of 2.24 trillion yuan from 18.87 trillion yuan at the end of 2024, an increase of 11.87%. The increased allocation to bonds reflects that, in an environment of declining interest rates and converging market risk appetite, bonds as a “stabilizer” have played an even more significant role.

From the asset allocation disclosed in the 2025 annual report of public funds, public funds have increased their layout in the equity market and seized structural opportunities.

Meanwhile, looking at the changes in the scale of equity funds, index funds are becoming investors’ “favorites.” Data shows that ETF (Exchange-Traded Fund) products, which dominate the index fund sector, increased their total scale by 2.29 trillion yuan in 2025, a growth rate of 61.29%, with the total scale exceeding 6 trillion yuan by the end of last year; 350 products were issued throughout the year, with the total number surpassing 1,400.

Additionally, from the perspective of asset allocation structure, manufacturing remains a core area. Data shows that by the end of last year, public funds held stocks in manufacturing valued at nearly 5 trillion yuan, accounting for 55% of total stock holdings; as a pillar industry of the economy, manufacturing’s prosperity continues to rise, and it has been a long-term allocation target for public funds. At the same time, some fund managers tend to choose stable-growth sectors to match investors’ demand for steady returns. The capital flow also reflects recognition of manufacturing resilience.

Overall, in 2025, public funds continued to increase their allocation to stocks, especially accelerating entry into the market through index funds, reflecting a long-term optimistic outlook on China’s economic recovery and industry development.

Several fund annual reports indicate that in 2026, China’s economy will continue to improve, and sectors with improved profit expectations will remain the main investment themes for a longer cycle.

The annual report of Harvest CSI 300 Science and Technology Innovation Board Chip ETF Launch Connect Fund states that in 2026, China’s equity market is expected to continue a structural trend driven by multiple positive factors, with the core driving force shifting from valuation recovery to profit improvement; macro policies are expected to remain accommodative, providing support for the market. Meanwhile, the global monetary policy is tending toward easing, and the dollar’s expected weakening may improve liquidity in emerging markets, attracting more global funds to increase allocations to Chinese assets; domestic residents’ assets migrating into equities, along with long-term funds such as insurance capital entering the market, will also provide important incremental liquidity.

(Editor: He Xin)

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