In April, the A-share market showed a volatile upward trend, with growth-oriented styles clearly outperforming. Driven by this, growth funds delivered strong performance, creating excellent returns for fund of funds (FOFs) with significant allocations to such assets.
Notably, many of the top-performing FOFs in April heavily invested in actively managed equity funds, a departure from previous trends. In terms of investment focus, expanding domestic demand and strengthening technology remain key directions.
Since the start of April, the A-share market has trended upwards with volatility, with major indices generally posting gains but showing significant divergence. The Shanghai Composite Index rose 5.66% in April, the Shenzhen Component Index increased by 12.09%, and the ChiNext Index surged 15.45%. Meanwhile, the SSE 50 Index, representing large-cap blue chips, rose 5.64%, indicating a clear advantage for growth-oriented styles.
The technology and growth sectors became the absolute main theme of the market, with communications, diversified industries, and electronics leading the gains. Within the tech sector, computing hardware—such as semiconductors, components, and optical modules—performed particularly well. Defensive sectors also attracted capital but showed relatively moderate performance; for instance, the coal sector accumulated an 8.26% gain since April 21, drawing defensive allocations due to its high-dividend attributes.
Looking at the monthly performance of publicly offered FOFs, top performers heavily favored growth-themed funds. Among them, the Jiao Yin Zhi Xuan Xing Guang A fund achieved a return of 20.46% in April, making it the best-performing publicly offered FOF for the month. Based on its first-quarter holdings, funds like Rong Tong Hang Ye Jing Qi C, Rong Tong Chan Ye Qu Shi Zhen Xuan C, and Jiao Yin You Ze Hui Bao C ranked high in recent one-month performance, with some funds gaining over 31%.
Xin Ao Yi Yuan Yang Lao Mu Biao 2055 Wu Nian was another standout performer, recording the best monthly result among target-date retirement FOFs with a 13.04% gain in April. According to its first-quarter report, holdings such as Rong Tong Chan Ye Qu Shi Zhen Xuan C, Cai Tong Cheng Chang You Xuan C, and Fu Guo Shi Dai Jing Xuan C delivered outstanding performance over the past month, with many actively managed equity funds exceeding 30% returns.
It is noteworthy that actively managed funds appeared frequently in the top-performing FOFs in April, which was relatively uncommon previously. Especially as FOFs increasingly emphasize index product allocations, the continued heavy weighting in actively managed equity funds—and their simultaneous inclusion in multiple top FOFs—is particularly rare.
For FOFs, many products had previously allocated to overseas equity assets, and April saw several bright spots in international markets. However, it is important to note that some FOFs have begun reducing their exposure to overseas equities, with consecutive cuts leading to notable shifts in asset allocation.
As volatility in overseas asset prices increases, FOF managers' attention to international fund products has declined. Additionally, FOF allocations to overseas funds are diverging, with some funds showing significant credit rating downgrades and substantial changes in duration and yield to maturity.
According to statistics from Fang Zheng Securities, in the first quarter of 2026, FOF allocations to overseas equity and bond funds decreased overall. Notably, allocations to overseas bond funds fell below 30 billion yuan for the first time since their peak in the first quarter of 2025. By the end of the first quarter of 2026, overseas fund products appeared in the top ten holdings of 243 FOF quarterly reports, accounting for 43.63%—a sharp decline of over 7 percentage points from 51.18% in the fourth quarter of 2025, marking the second consecutive quarter of accelerated decrease.
A-share assets and related thematic funds remain key areas to watch. Regarding the outlook for A-shares after the holiday and into May, Zhang Jun, chief strategist at Huajin Securities Research Institute, pointed out that within the technology and growth sectors, considering current gains and fundamentals, photovoltaics and lithium batteries within the new energy sector are preferred directions. Additionally, commercial aerospace and semiconductor areas related to domestic computing power in the electronics sector, which have seen lower previous gains, are also worth close attention.
In his view, opportunities exist in AI applications and robotics innovation in May, presenting current layout value. The AI hardware sector continues to show the highest market momentum; if these sectors experience volatility or minor adjustments in May, it could provide a window for buying on dips. For cyclical growth directions, priority should be given to non-ferrous metals, chemicals, and other commodities experiencing price increases.
Furthermore, undervalued blue chips are worth attention, particularly in the securities and consumer sectors. Within consumer areas, industries such as food and beverages, social services, and commercial retail hold allocation value for May.