In the second quarter of 2026, the FOF fund market in China experienced a notable resurgence, with total management scale surpassing the 3000 billion yuan mark again. This represents an increase of 248.71 billion yuan from the previous quarter, signaling a robust recovery in investor interest and asset accumulation.
Scale and Count Overview
As of June 30, 2026, the entire market hosted 620 FOF funds, comprising 377 general FOF funds and 243 target-date retirement FOF funds. The number of FOF funds increased compared to the previous quarter. The total management scale for all FOF funds stood at 3095.72 billion yuan, with general FOF funds accounting for 2419.62 billion yuan and target-date retirement FOF funds holding 676.10 billion yuan. This total represents a sequential quarterly growth of 8.74%.
New Fund Issuance Trends
During the second quarter, 42 new FOF funds were launched, a decrease of 11 funds (or 20.75%) from the previous quarter. Of these, 41 were general FOF funds and only one was a target-date retirement FOF fund. The total fundraising scale for these new offerings was 486.93 billion yuan, a significant decline of 203.56 billion yuan (or 29.48%) from the prior quarter. The majority of this new capital, 481.78 billion yuan, was raised by general FOF funds.
Fund Manager Landscape
The top ten FOF fund managers by scale controlled 60.93% of the total market share, a slight decrease from the previous quarter. The fund managers with the largest increase in scale for general FOF funds and target-date retirement FOF funds were Boshi Fund and E Fund, respectively. A total of 76 fund managers offered general FOF products, while 66 offered target-date retirement products, with one new manager entering the general FOF space.
Performance Highlights
Across all FOF categories, equity-oriented target-date retirement FOF funds delivered the best overall performance in the second quarter with an average gain of 17.39%. In contrast, bond FOF funds were the weakest performers, posting a modest average return of 1.11%. Among individual funds, the best-performing general FOF fund was the E Fund Advantage Return Hybrid (FOF-LOF) A, which achieved a one-year return of 157.18% as of the end of the second quarter. The top-performing target-date retirement FOF fund was the E Fund Pension 2055 Five-Year Holding Hybrid (FOF) Y, with a one-year return of 97.44%.
Portfolio Holdings Analysis
As of the end of the second quarter, pure bond funds remained the largest holding category within FOF portfolios, with a combined scale of 928.09 billion yuan, representing 50.24% of total assets. Index bond funds were the second largest holding, valued at 309.62 billion yuan (16.76%). Mixed bond funds were the only other category holding over 10% of the total, at 10.68%. The allocation to pure bond funds increased notably from 48.34% in the prior quarter, while holdings in money market funds decreased from 3.50% to 2.15%.
Manager Commentary
Fund managers highlighted a complex global and domestic environment. Managers from ICBC Credit Suisse and Zhong Ou Funds noted that the second quarter saw a significant rally in domestic equity markets, driven by technology and AI themes, with the ChiNext Index and STAR 50 Index hitting new highs. They cited strong external demand but weak domestic consumption as key factors. Bond markets saw yields decline, and managers adopted a neutral-to-cautious approach, focusing on short-duration and high-grade credit to manage risk. Managers also adjusted portfolios by increasing exposure to U.S. equities and Hong Kong stocks, while reducing positions in some cyclical and small-cap sectors. The consensus view pointed to a preference for growth and technology styles, with a cautious outlook on bonds due to limited upside potential.