On March 9, China Merchants Zhiying Youxuan 6-Month Holding Mixed FOF announced an early closure of its fundraising period. Industry sources revealed that the FOF is expected to raise over 2 billion yuan. Including this product, the number of FOFs with fundraising sizes exceeding 1 billion yuan since the beginning of 2026 has reached 16, accounting for nearly 50% of all newly established FOFs this year. Data comparisons across multiple dimensions indicate that the second wave of expansion in public FOFs, which began in 2025, is intensifying in 2026.

This trend is driven by innovative products such as mixed bond-biased FOFs and ETF-FOFs, which have become key vehicles for allocating low-risk capital in a multi-asset environment. Similar to the development of ETFs, this round of FOF expansion is largely led by top-tier fund companies and dominant banking channels. However, despite the nearly 300 billion yuan FOF market, the largest manager currently oversees only slightly over 20 billion yuan. The disparity in FOF scale among managers does not yet reflect a strong "Matthew effect," and with ongoing changes in product design, investment strategies, and fee structures, FOFs remain a strategic growth area for fund companies.

Average fundraising size has increased while the average number of fundraising days has decreased. According to a March 9 announcement from China Merchants Fund, the China Merchants Zhiying Youxuan 6-Month Holding Mixed FOF began fundraising on February 26, with an originally scheduled end date of March 18. However, it closed early on March 10. Industry sources indicated that the product raised over 2 billion yuan during its offering period, with estimates around 2.7 billion yuan.

Wind data shows that, as of March 9, 15 FOFs established since the start of 2026 have raised more than 1 billion yuan. These "mini hits" accounted for over 45% of the 33 newly launched FOFs during this period. This trend, which gained attention in 2025, has strengthened further in 2026 amid increased investor participation.

In 2025, 89 FOFs raised a total of 84.529 billion yuan, with 25 products exceeding 1 billion yuan in fundraising—representing 28.09% of the total. The average fundraising size that year was 950 million yuan, with a median of 391 million yuan. The average number of subscribing investors was 3,884.06, with a median of 1,908. In contrast, the 33 FOFs established in 2026 have an average fundraising size of 1.423 billion yuan and a median of 966 million yuan. The average number of subscribing investors rose to 5,265.76, with a median of 2,842.

Notably, while fundraising sizes have grown, the average number of fundraising days has shortened significantly—from 18.3 days in 2025 to 9.64 days in 2026. Among the 15 "mini hits" this year, six raised funds in just one day. For example, the Bosera Yingtai Zhenxuan 6-Month Holding FOF, established in February, raised 5.844 billion yuan in a single day. Similarly, the Fullgoal Zhihui Wenjian 3-Month Holding FOF, which raised over 4 billion yuan, completed fundraising in just three days.

Looking ahead, FOF issuance remains active. As of March 9, 19 FOFs were being offered in the market, issued by 16 different managers. These include industry giants such as E Fund, Fullgoal, China Merchants, and GF Fund, as well as smaller firms like Caitong Fund, Fidelity, CMBC Fund, and Pengyang Fund. China Merchants Fund, Yongying Fund, and Fullgoal Fund each have two FOFs currently in issuance. Additionally, four other FOFs have set issuance dates before March 9, from managers including Tianhong Fund, Xinda Australia Asia Fund, Fullgoal Fund, and Mingya Fund.

A key characteristic of this FOF expansion is the emphasis on multi-asset allocation. All 33 FOFs established this year and the 23 currently being offered are mixed-type FOFs, with many highlighting "multi-asset" or "diversified allocation" strategies in their names. The investment scope of FOFs has also broadened significantly. For instance, the prospectus of Yongwing Yuanxin Wending Multi-Asset 6-Month Holding FOF indicates that it can invest in QDII funds, mutual recognition funds, index funds, commodity funds, and public REITs, among other assets.

Two notable trends have emerged under this multi-asset theme. First, ETF-FOFs, which primarily invest in exchange-traded funds, continue to gain popularity. Three of the FOFs established this year are ETF-FOFs, and as of March 9, 13 such products have been submitted for approval—not only by large and mid-sized firms like GF Fund and Zhongou Fund but also by smaller managers such as Yingda Fund and Bank of China Fund. Yingda Fund alone has submitted three ETF-FOF applications this year, covering themes like electric power and bond strategies.

Second, the issuance of standard FOFs has increased while pension-target FOFs have declined. All 33 FOFs established in 2026 are standard FOFs, with the most recent pension FOF dating back to December 2025. Throughout 2025, only 11 pension FOFs were launched, accounting for less than 15% of the total.

From a broader perspective, the current FOF issuance boom represents the second major expansion since the product's introduction in 2017. The first expansion occurred between 2020 and 2021, followed by a contraction from 2022 to 2024. China International Capital Corporation (CICC) recently noted that the rebound in equity markets since 2025, combined with growing investor interest in multi-asset allocation amid low interest rates and strong channel support, has propelled FOFs into a new expansion cycle.

CICC highlighted two main drivers: the growing acceptance of diversified allocation concepts and the strong performance of mixed bond-biased FOFs. Investors are increasingly shifting from chasing high returns in single assets to managing risk across markets and asset classes—a trend that aligns well with FOFs' secondary diversification benefits. Meanwhile, the expanding range of ETF products and more standardized active management funds under new regulations provide FOF managers with a robust toolkit for strategy implementation.

In this cycle, mixed bond-biased FOFs have contributed significantly to growth. In 2025, these products outperformed narrow "fixed-income plus" funds, and bank retail channels are expected to play an even greater role in future FOF expansion. Against a backdrop of low interest rates and "deposit migration" in 2026, mixed bond-biased FOFs may attract more low-risk capital. As a result, FOF managers are increasingly focusing on building partnerships with banking channels. Developing mixed bond-biased FOFs with a "fixed-income plus" strategy could be an effective way to capitalize on this expansion.

Data shows that the 33 FOFs established this year are custodied by 17 institutions, 13 of which are banks. Since 2025, China Merchants Bank has custodied 38 FOFs with a total size of nearly 63.732 billion yuan, accounting for almost half of the total fundraising amount of 131.496 billion yuan. However, top-tier fund companies continue to dominate partnerships with major banking channels.

Similar to other product categories, the FOF market is led by large players. Currently, 84 asset managers offer FOF products, with a combined scale approaching 300 billion yuan. Among them, 74 manage less than 10 billion yuan in FOF assets, and 49 have FOF sizes below 1 billion yuan. Fullgoal Fund, the largest FOF manager, oversees approximately 24.204 billion yuan, while other major managers typically manage between 10 and 20 billion yuan.

Although the FOF landscape is dominated by large firms, the concentration is not extreme, indicating continued growth opportunities. "Compared to ETFs, FOFs offer more entry opportunities for small and mid-sized asset managers. Many recent issuers are smaller firms, and success in this area could help them achieve a breakthrough. However, while there are no explicit barriers to entry, hidden challenges—particularly in channel access—remain significant hurdles for smaller players," noted a senior executive at a asset management firm in South China.