Last week, the A-share market experienced broad-based gains, leading to a significant boost in the performance of publicly offered FOFs, with a high investment success rate. All equity-oriented FOFs achieved positive returns, while the number of other equity-focused FOFs recording weekly losses was minimal. Among the top-performing products, several funds posted weekly returns exceeding 7%. Sectors such as communications, electronics, and machinery equipment led the gains, benefiting FOFs invested in these areas.
From April 6 to April 12, individual stocks in the A-share market generally rose, and the bond market also saw a partial recovery. Overall, returns from diversified asset allocation strategies were notable. Against this backdrop, the performance of publicly offered FOFs improved to varying degrees, with many recording single-week returns above 7%.
According to Wind data, China AMC Optimal Allocation A led equity-oriented FOFs with a weekly return of 7.33%. Among hybrid FOFs, BOC Smart Selection Aggressive Three-Month A achieved a weekly return of 7.35%. In terms of investment success rates, only three hybrid FOFs and pension target FOFs recorded negative returns for the week, while all equity-oriented FOFs delivered positive performance.
Broad market indices also advanced. The Shanghai Composite Index closed at 3,986.22 points, up 2.74%, the Shenzhen Component Index ended at 14,309.47 points, rising 7.16%, and the ChiNext Index finished at 3,448.79 points, surging 9.50%. The communications, electronics, and machinery equipment sectors were among the top performers.
An analysis of the top holdings of leading FOFs reveals that funds such as ChinaAMC ChiNext Growth ETF, Huabao Technology ETF, and Western Lead ChiNext Large-Cap ETF gained over 10% in the past week, which were previously heavily weighted by some high-performing FOFs. Analysts suggest that this performance reflects a combination of earnings realization, industrial catalysts, and easing geopolitical risks, creating a positive feedback loop between improving景气度 and valuation recovery.
For instance, the communications sector continues to see fundamental improvements. Citing data from industry institution CRU, UBS reported that the spot price of mainstream optical fiber in China had surged over 400% year-on-year by April, boosting profit expectations for the optical communications industry chain. In the electronics sector, rising prices along the supply chain, coupled with policy support and industrial catalysts, have driven capital back into technology and growth stocks, sustaining the sector's upward momentum.
Regarding current market dynamics and future focus areas, Bosera Funds analysis indicates that since March, the primary trading logic for major global assets has revolved around developments in U.S.-Iran tensions. Currently, overseas inflation and liquidity expectations have deteriorated significantly compared to the start of the year. Domestically, initiatives against involution and advancements in AI industries remain generally positive but are expected to have a less pronounced impact on market direction than in 2025.
Key focal points for the second quarter are anticipated to include: the resilience of China's economy and corporate earnings, both overall and structurally, amid geopolitical instability; potential shifts in overseas liquidity expectations; developments in AI computing power and applications; and progress in domestic efforts to counter involution.
As the second quarter begins, strategy reports from fund companies emphasize a greater focus on certainty—whether in industry development or corporate earnings. Against a backdrop of persistent external disruptions, the safety of major asset allocations has become increasingly critical.
Some institutional perspectives highlight two main themes: energy security as a stabilizing anchor, with new energy and coal chemical industries frequently mentioned; and AI computing power remaining a crucial benchmark, where performance is becoming the ultimate test. With the shadow of high oil prices lingering, institutions are leaning towards a combination of energy, technology, and dividend-yielding assets to navigate uncertainty, rather than making one-sided bets.
AVIC Securities analysis suggests that high oil prices may persist into the second quarter, becoming a dominant trading theme. Additionally, with the Federal Reserve's interest rate cuts slowing noticeably and domestic policy space potentially constrained, market risk appetite is turning more conservative, leading to a structural preference for dividend and new energy sectors.
Research from GM Futures indicates that A-shares may see price recovery in the second quarter, with investments focusing on reasonably valued sectors with stable earnings. Priority allocations are recommended for the new energy industry chain and undervalued value stocks. Sectors like non-bank financials, non-ferrous metals, and power equipment have shown significant profit improvements, while real estate, consumer electronics, and semiconductors continue to face earnings pressure.
Bosera Funds' Q2 2026 Macro Strategy Report points out that looking ahead to the second half of 2026, a positive turn in the Producer Price Index (PPI) could further guide the recovery of listed companies' net profit margins. However, against a backdrop of weak demand logic and marginal stability in fiscal support, the pace of recovery may still be constrained. Rising PPI could also widen the profit divergence among different sectors.
Therefore, diversifying across multiple assets and strategies, rather than concentrating on a single theme, leverages the inherent advantages of FOF investing. Since 2026, the fundraising pace of FOFs has accelerated, with overall investment performance standing out, making them an increasingly preferred choice for both institutional and individual investors seeking diversified asset allocation.