In the public fund industry where the strong tend to get stronger, top-tier fund houses with assets under management exceeding a trillion yuan are typically seen as benchmarks for investment research strength and risk control capabilities. However, a surprising situation has emerged: as of 2026, the worst-performing product among all domestic equity-oriented hybrid funds is from the established major firm PengHua Fund.

Adding to the irony, this fund that is "trailing at the bottom" is not a marginalized mini product but an innovative floating-fee-rate fund that is a key strategic focus for PengHua Fund and is personally managed by a core senior executive from the company's equity investment division.

Having been established for less than ten months, its net asset value has nearly halved, even plummeting nearly 30% in a single week. This extreme performance has not only shattered investor confidence but also cast significant market doubt on the investment research and risk control capabilities of this trillion-yuan scale public fund manager.

A Trillion-Yuan Public Fund Firm at the Industry's Forefront

As a long-established domestic public fund institution, PengHua Fund has consistently been in the industry's first tier and is a veritable "trillion-yuan giant."

According to Wind data, as of July 20, 2026, PengHua Fund Management Co., Ltd. ranked 7th in the entire industry with total assets under management of 1,166.415 billion yuan. Within this, its non-money market fund AUM reached 645.720 billion yuan, also firmly placing it within the industry's top ten.

With its comprehensive product line and years of market presence, PengHua Fund has long been viewed by investors as representative of the notion that "larger firms are more stable." Precisely because of this, the extreme performance of one of its core products creates a particularly stark contrast and warrants deeper market scrutiny.

Ten Months Old and a "50-Cent Fund," Performance Consistently Ranks Last

The product delivering this embarrassing report card is the PengHua Manufacturing Upgrade Mixed Fund C (025341) under PengHua Fund.

Based on the latest Wind data as of July 17, 2026, this fund's performance is at the very bottom across all metrics:

* Its year-to-date (YTD) return is -44.55%, ranking 5030th out of 5030 similar funds in the entire market—dead last.
* Its six-month return is -47.00%, also ranking last among 5,046 comparable funds.
* Since its inception on October 14, 2025, a period of less than ten months, the fund's unit net asset value has fallen from 1 yuan to 0.5767 yuan, a cumulative decline of 42.33%, turning it into a "50-cent fund" with its value nearly halved. Its ranking since inception is 4821 out of 4827 in its peer group, also placing it at the very bottom of the industry.

A horizontal comparison further highlights the severity of its underperformance: over the same period, the fund's performance benchmark rose by 15.37%, the CSI 300 Index fell only 2.18%, and the average return for equity-oriented hybrid funds was 2.94%. This means the fund has not only significantly underperformed its benchmark but has also lagged far behind the market average, failing to even keep pace with a broad market index.

Plunge Exceeds 30% in a Single Week, Drawdown Comparable to Individual Stocks

Since the beginning of July, the pace of the fund's net value decline has accelerated sharply, showing a curve akin to "free fall," with short-term volatility intensity far exceeding that of a typical public fund.

According to Wind data, over the five trading days from July 13 to July 17, the fund's daily adjusted net value changes were: -11.27%, -5.15%, -2.59%, -4.90%, and -9.86%. In just one week, the cumulative loss exceeded 30%.

Consecutive daily losses exceeding 5%, with two trading days seeing declines approaching or surpassing 10%, represents a volatility intensity on par with highly volatile individual stocks. For a public fund, such extreme short-term drawdowns typically indicate a portfolio highly concentrated in a single sector, a lack of effective risk hedging, and the potential influence of the negative feedback loop from redemptions often seen in smaller-scale funds.

A Floating-Fee-Rate Product Steered by Senior Management

It is particularly noteworthy that the PengHua Manufacturing Upgrade Mixed Fund is not an ordinary thematic fund but an innovative floating-fee-rate product launched in the context of the public fund industry's fee reform.

The original intent of the floating fee mechanism is to deeply align the fund company's management fee income with investor returns, creating a structure of "higher fees for good performance, lower fees for poor performance," thereby incentivizing fund companies to improve investment research quality and prioritize investor experience. Such products are usually treated as strategic priorities by fund companies and supported with high-quality investment research resources.

PengHua Fund did indeed assign a "top-tier" team to this product: the fund manager is Yan Siqian, who currently serves as Managing Director (MD), General Manager of Equity Investment Department III, and Investment Director at PengHua Fund. She is a core member of the company's senior equity management and a key fund manager.

On one side, there is strategic importance at the company level and fund manager allocation at the senior executive level. On the other side, there is the worst performance in the entire market and a net asset value that has halved in less than a year. This stark contrast has prevented the intended incentivizing effect of the floating fee from materializing. Instead, this innovation product, which was heavily promoted, has become a cautionary tale within the industry.

Repeated Occurrences of "Halved" Products Raise Questions About Giant's Risk Control

In fact, this is not the first time PengHua Fund has seen a product experience a significant drawdown with its net value nearly halved. Previously, the PengHua Global High Yield Bond Fund drew widespread market attention due to a sharp plunge in its net asset value, causing substantial losses for investors.

According to Wind data, as of June 29, 2026, this bond-type QDII fund, which should have been stable—the PengHua Global High Yield Bond RMB fund—had a cumulative five-year return of -45.94%, ranking at the bottom among 66 similar funds.

Its near-halving performance shattered all investor expectations for a "core holding" asset. Behind this lies a reckless credit quality downgrade strategy and effectively non-existent cross-border risk controls.

The consecutive occurrence of extreme drawdowns in products across different categories, from fixed-income QDII bond funds to equity-themed hybrid funds, inevitably leads the market to question PengHua Fund's compliance and risk control framework:

Did the company conduct comprehensive risk assessment and impose constraints on extreme bets on a single sector?

Were there preemptive contingency plans and risk control measures for the liquidity risks and negative redemption feedback risks associated with small-scale products?

For an innovation product like the floating-fee-rate fund, which was a key strategic initiative, did its investment research decisions and accompanying risk controls match its strategic positioning?

For a trillion-yuan scale leading public fund manager, asset growth is not the sole objective. Maintaining investor trust relies on long-term, stable investment research capabilities and an unbreachable risk control bottom line. If investors are attracted merely by the "aura of a giant firm" and "innovation concepts," only to be delivered bottom-ranking performance, what gets consumed is the credibility the industry has built up over many years.

The original purpose of the floating fee reform was to create "shared interests" between fund companies and investors. However, reality has repeatedly shown that fee mechanisms are merely surface-level designs. What truly determines investor returns is always the fund company's investment research strength, risk control standards, and sense of responsibility towards its investors.

For PengHua Fund, this worst-performing fund should not be viewed merely as a simple case of "misjudging a sector." It should serve as a catalyst for deep reflection on its investment research system and risk control mechanisms.