Made 2.61 trillion yuan! Public mutual funds have set a new record.

This article is reprinted from the Investment Banking Circle

In the 2025 annual report season for public funds, a performance sheet deemed “epic” was delivered. Data from Tianxiang Investment Advisory shows that the entire industry achieved a total profit of up to 2.61 trillion yuan last year, setting a new historical record, more than doubling from 1.28 trillion yuan in 2024. This is undoubtedly a long-awaited “big money-making year,” and the market is buzzing with excitement. However, beneath the surface of glory, dark currents are surging. A fierce “survival struggle” led by top institutions, centered around ETFs as the core battleground, is unfolding intensely within this industry. But behind the apparent prosperity lies the extreme demonstration of the Matthew Effect and the difficult breathing space for small and medium players.

01

Where does the money come from?

Looking at the structure of this 2.61 trillion yuan profit, you will see a clear picture: equity funds are the absolute “money-printing main force.”

G-type funds contributed 26.1k yuan throughout the year, hybrid funds contributed 12.8k yuan, and these two types of equity products together nearly reached 20 trillion yuan in profit, accounting for 76.9% of the total market profit.

Focusing solely on active equity funds, in 2025, they earned a total of 26.1k yuan, more than ten times the amount in 2024.

Bond funds earned 20k yuan for the year, money market funds 184.15B yuan, commodity funds 1,037.94 billion yuan, QDII funds 1,125.64 billion yuan, and FOF products 186.85 billion yuan.

Although fixed-income products also made money, compared to 2024, there was a significant decline. Bond funds’ profits dropped by more than half year-on-year, and money market funds’ profits shrank substantially as well.

However, commodity funds posted an astonishing growth rate: a profit increase of 551.07% year-on-year, leading all fund categories.

In summary: 2025 is the year of equities, bonds take a back seat, and gold ETFs quietly make big profits.

02

Policy + Capital + Technology

The Shanghai Composite Index rose 18.41% in 2025, the Shenzhen Component Index increased 29.87%, CSI 300 gained 17.66%, and the STAR Market 50 Index soared 60.86%. Hong Kong stocks were not to be outdone, with the Hang Seng Composite Index’s valuation contribution accounting for 28.99 percentage points of the full-year increase.

With such a rally, the net asset values of public funds naturally rose along with the market. But what’s more worth paying attention to is the underlying logic of this bull market.

Policy. The package of financial policies announced on September 24, 2024, was the true starting gun for this round of market rally. Since then, the Shanghai Index climbed from 2,761 points to above 4,000 points. Monetary policy was also quite supportive, with continued increases in medium-term lending facilities, a reduction in the 7-day reverse repo rate, and a restructured liquidity supply mechanism.

Capital. In the first half of 2025, the funds flowing into A-shares mainly came from institutional investors, quite different from the retail-led market in 2015. Institutional funds were relatively rational, holding onto their positions without easily selling, providing a “slow bull” foundation for the market.

In the second half, the profit-making effect spread, and individual investors accelerated their entry. Over the entire year, individual investors increased their fund holdings by nearly 1 trillion units compared to 2024. Institutions set the stage, retail investors played their part, forming a complete relay chain of capital.

Technology. The main theme of the 2025 market was crystal clear: AI. The term “AI” was mentioned over 4,000 times in fund annual reports, making it the top buzzword. Sectors related to artificial intelligence—such as computing power, chips, and optical modules—exploded in succession. CATL, Zhongji Xuchuang, and Xinyi Solar became the top three holdings by market value among public funds.

Xinyi Solar soared 424.03% for the year, Zhongji Xuchuang increased 396.38%, and Sunshine Power rose 137.13%. These stocks, often doubling or tripling, became the direct “ammunition” for the surge in fund profits.

Manufacturing remains the largest sector in holdings, accounting for 55.11% of G-type funds’ investment market value, followed by finance at 9.97%, and information transmission, software, and IT services at 5.70%. The fund allocation is basically concentrated in the leading companies of these industries.

03

Who is making money? Who is falling behind?

Beneath the 2.61 trillion yuan industry total profit, the differentiation is a more intriguing topic.

From the management companies’ perspective, among the 161 fund companies (including securities firm asset management) included in the statistics, only four reported losses. Making money is common, but the scale varies greatly—some earn a lot, others earn little.

Easily the top “big name,” E Fund, earned 327 billion yuan, more than the combined total of the second to fourth places. The top ten companies together earned 1.4 trillion yuan, accounting for 55% of the entire industry profit. The “attracting capital” ability of the leading firms is simply extraordinary.

Looking at their own operational performance, the pattern is equally clear. Wind data shows that in 2025, the entire industry’s management fee income reached 132.3 billion yuan, surpassing 130 billion for the first time, a year-on-year increase of about 5.5%.

E Fund led with 103.79B yuan in management fees, followed by China Asset Management with 112.56B yuan, and GF Fund with 18.68B yuan. However, Huatai-PineBridge’s management fee income fell from 10k to 26.1k, a decline of 15.62%.

The industry’s oligopoly effect is becoming more pronounced. Leading funds like E Fund have built formidable barriers in research, strategy, and client trust, making it difficult for small and medium-sized funds to break through.

In terms of net profit, E Fund continued to lead with 14k yuan, ICBC Credit Suisse rose to second with 8.45B yuan, and GF, Southern, and Huaxia ranked third to fifth. The top five together posted net profits of 7.11B yuan.

Notably, ICBC Credit Suisse’s net profit growth of 42.51% was quite impressive, thanks to its deep cultivation in non-public offerings, managing 653 pension, private equity, and special portfolios, with a non-public business scale of about 1.46 trillion yuan, becoming a key profit pillar.

Another interesting detail: revenue and net profit rankings are not perfectly aligned. China Asset Management reported 6.27B yuan in revenue, Southern 2.26B yuan, both higher than GF’s 1.91B yuan, but GF’s net profit surpassed both.

This indicates that differences in cost control and marketing strategies are significantly affecting final profitability.

Of course, the differentiation is two-way. Hongta Red Soil Fund’s net profit surged 1131% year-on-year, while China Post Entrepreneurship Fund turned from a loss of 19.25 million yuan to a profit of 54 million yuan.

Meanwhile, seven firms—including Huatai-PineBridge, Puhui Ansheng, and Cinda Aoyuan—experienced declines in both revenue and net profit, with Dongxing Fund’s net profit dropping 77.48% YoY. The industry landscape is accelerating its reshuffle.

04

How did public funds make money in 2025?

Reviewing the 2025 fund allocation strategies, the core is two words: “consolidation.” But “consolidation” also has two very different approaches.

The first is passive index-based allocation.

In 2025, broad-based ETFs were undoubtedly the “profit kings.” Huatai-PineBridge CSI 300 ETF took the crown for “most profitable single fund” with 785.16 billion yuan in profit, followed by E Fund CSI 300 ETF with 3.81B yuan.

Among the top 20 most profitable funds, ETFs occupied 18 seats. The trend of investors using ETFs to deploy the market was further reinforced, with the scale and returns of leading broad-based ETFs resonating together.

By the third quarter of 2025, the scale of passive index funds exceeded 11 trillion yuan, and ETF total assets surpassed 50 trillion yuan. In terms of product count, the market had 1,260 ETFs tracking over 480 indices. The era of passive investing has truly arrived.

The second approach is active equity with a “tech-heavy” focus.

Among active equity funds, Ruiyuan Growth & Value Hybrid A was the most profitable, earning 3.01B yuan. Xingquan He Run Hybrid A and Nuoxin Growth Hybrid A followed with 14.67B and 14.6k yuan respectively.

These top-performing active funds are highly concentrated in the tech sector. Products like Dongfang New Energy Vehicle Theme Hybrid, China Europe Times Pioneer, and Fuguo Tianhui Growth all have heavy positions in AI, new energy, and chips.

In 2025, the median net value increase of active equity funds was 25.8%, outperforming the 17.66% of the CSI 300 but lagging behind the STAR Market 50. In other words, choosing the right sector is more important than anything.

The top ten holdings are mostly dominated by leaders like CATL, Zhongji Xuchuang, Xinyi Solar, and Kweichow Moutai, with an astonishing degree of concentration.

This reflects a trend: public funds are shifting from a “scattershot” approach to a “bet on certainty” concentrated strategy.

You don’t need to understand everything, but you must understand AI.

05

Making money is easy, but sustaining profits is hard

With a profit of 2.61 trillion yuan in front of us, the most pressing question for investors is:

Will we still be able to make money in 2026?

Fund managers have given their answers in annual reports. Among over 4,900 fund reports, “AI” was mentioned more than 4,000 times. In 2026, AI remains the most certain main line in fund managers’ minds.

However, the logic is changing. In 2025, the focus was on AI infrastructure—computing power, chips, and other “selling shovels” industries; in 2026, fund managers generally believe that AI applications will see large-scale commercial deployment, with application-side opportunities potentially surpassing infrastructure.

In the fourth quarter of 2025, market style shifted temporarily, with consumer and dividend stocks rising against the trend. The China Securities Consumer Index rebounded after four years of decline. Whether this style shift is just a fleeting phenomenon remains to be seen.

But one fact must be acknowledged: the market environment in 2025—policy warm winds, ample liquidity, and technological breakthroughs—is unlikely to be fully replicated in 2026.

The tug-of-war around 4,000 points in the big A market already indicates that incremental funds are becoming more cautious.

The consensus among fund managers is that market volatility in 2026 will significantly increase, with structural opportunities still present, but a broad rally is unlikely to continue.

From the capital perspective, in 2025, individual investors held 17.45 trillion units of funds, accounting for 55.63%, while institutional holdings were 13.91 trillion units, or 44.37%.

With retail investors making up over half, volatility driven by sentiment may be more intense than in 2025.

Another variable not to be ignored: fee reduction. Although management fees in 2025 first exceeded 130 billion yuan, the growth rate was only 5.5%, far below the scale expansion rate.

The pressure of fee reforms is gradually emerging—more than half of the industry’s management fees went to the top 15 firms, while over 60 companies earned less than 100 million yuan in management fees. The pattern of big players eating the meat and small ones drinking the broth—or even having no broth—will not change in the short term.

Therefore, the likely script for 2026 is: big money is harder to earn, but structural opportunities still exist.

The new high of 2.61 trillion yuan in profits marks both a highlight for the public fund industry and the start of a brutal differentiation.

For top institutions, the key strategic challenge in the next phase is how to balance scale expansion with profit growth.

For small and medium-sized firms, finding a differentiated positioning and building unique research capabilities are the only ways to avoid being eliminated in the “survival struggle.”

And for ordinary investors, 2026 may no longer be a year where “blindly buying” guarantees profits