CITIC Securities | Public fund scale surpasses 38 trillion yuan for the first time

Byline: Yao Ziwei, Sun Shiyu, Ying Shaohua, Miao Jinjin, Xu Chuhan (Research Assistant)

In recent years, the overall size of China’s public mutual fund industry has continued to rise. As of February 2026, the total size of China’s public mutual funds first exceeded 380 trillion yuan. In terms of the sources of growth in the overall size, in February, most of the growth mainly came from increases in the number of units and size of money market funds and bond funds. From the driving factors, under the combined effects of the market’s “making money” sentiment and the decline in public fund fee rates, public mutual funds have become more attractive, thereby driving an increase in the overall fund size. Looking ahead to future size growth trends, bond fund and debt-oriented hybrid FOF fund sizes are expected to continue to grow steadily, while the sizes of stock and QDII products will mainly show a fluctuating upward trend. This week, funds in the medical sector performed relatively ahead of other sectors, with an average gain of 3.78% over the past week. This week’s fund allocations fell slightly, and remain at a mid-range level over the past one year. In terms of style, funds increased their holdings more in large-cap value, and also added to sectors such as pharmaceutical and biological. This week, fund issuance activity was at one of the higher levels over the past two years, with fund types mainly consisting of index funds and hybrid funds.

Public mutual fund size first breaks through the 380-trillion-yuan mark

In recent years, the overall size of China’s public mutual fund industry has continued to rise. According to the latest disclosed data from the Asset Management Association of China, as of the end of February 2026, the total number of public mutual fund products was close to 14,000, with total shares reaching 3.277 quadrillion units, and net fund assets of 3.861 trillion yuan. The number of fund units added in the month increased by 862.027 billion units; compared with the same period last year, this represents a year-over-year increase of 11.72%, and a month-over-month increase of 2.70%. Net fund assets increased by 839.778 billion yuan in the month, first breaking through the 380-trillion-yuan mark; compared with the same period last year, this represents a year-over-year increase of 19.79%, and a month-over-month increase of 2.22%, achieving positive growth for 11 consecutive months.

From the perspective of type structure, as of February 2026, money market products still accounted for more than 40% of the market. Bond products and stock products followed closely behind, representing 27.84% and 14.58%, respectively. Hybrid funds, other-type funds (including QDII funds, REITs, and other types) and FOF funds accounted for a smaller proportion.

Money market and bond funds became the main force behind growth in fund size; FOF products maintained a high growth rate

By product type, in February, the main sources of product-size growth came from money market funds and bond funds, with sizes increasing by 579.511 billion yuan and 216.734 billion yuan, respectively, and month-over-month growth of 3.79% and 2.06%. Together, the growth accounted for more than nine-tenths of the total size growth. Combining the overall fund unit growth rate for the month (2.70%), which is slightly higher than the size growth rate (2.22%), it indicates that the main driver of size growth in the month came from share growth in low-risk money market fund-like products, rather than from net value growth of equity and other products. In addition, it is worth noting that although the current stock of FOF funds is relatively small and has not made a significant contribution to the absolute value of size growth, it continued to deliver an exceptionally high month-over-month growth rate for size. After it achieved a month-over-month growth rate of more than 15% in January, in February the month-over-month size growth rate once again reached 12.28%, leading across all product types by a margin.

The significant increase in both the shares and size of money market and bond funds benefited from two main reasons: first, under the overall environment of continued declines in deposit interest rates, households carried out a “transfer of deposits.” For investors with short-term wealth management needs during the Spring Festival holiday period, the annualized fixed-deposit interest rates for bank deposit products with terms of one week to three months are typically within the 0.3%-0.7% range; even for one-year fixed deposits, the rate remains at around 1%. Moreover, once funds are deposited, they cannot be withdrawn flexibly. If investors need to withdraw temporarily, they can only earn interest according to the demand deposit rate. By contrast, the money market funds’ annualized yield over the most recent 7 days still exceeds 1.1%. At the same time, the liquidity and flexibility provided by money market funds are far greater than those of bank fixed deposits. Funds can be withdrawn at any time and withdrawn multiple times in batches, which can better meet investors’ needs for short-term flexibility during holidays. Second, due to market volatility being significantly elevated by holiday market closures, overseas policy uncertainty, and geopolitical conflicts. Taking the nomination of the newly proposed Fed chair at the end of January and the beginning of February as an example, on the first trading day of February, the Shanghai Composite Index fell nearly 2.5% in a single day, Shanghai gold fell more than 15% in a single day, and Shanghai silver fell more than 17% in a single day; over two days, the decline exceeded 35%. Under this macro backdrop, the Spring Festival holiday market closure lasting 10 days carried strong uncertainty, which intensified investors’ risk-avoidance sentiment and reduced risk appetite, leading them to choose money market and bond funds as a “safe haven” for their funds.

Since the Asset Management Association of China began treating FOF funds as a separately listed statistical item for size data in October 2025, FOF fund size has shown sustained positive growth. Among them, the monthly growth rates over the past three months—including February 2026—exceeded 10%. The rapid growth of FOF fund size has benefited from accelerated fundraising for FOF products and a steady stream of “breakout” products throughout the year. By the end of February 2026, FOF funds had been issued with more than 55 billion yuan in fundraising. Among them, the Bosera Ying Tai Zhenxuan 6-month holding period product and the CICC Yingxin Stable 6-month holding period product were established with more than 5 billion yuan each; the Industrial and Commercial Bank of China (ICBC) Ying Tai Stable 6-month holding product and the Fuguo Zhihui Stable 3-month holding product were established with more than 4 billion yuan each. In addition, several other FOF products were established with sizes exceeding 2 billion yuan. Several major reasons underpin the sustained “hot” momentum of FOF funds. First, FOF funds have diversified asset allocation characteristics: through investment with low correlation and diversification, they naturally exhibit a more resilient risk-return profile with lower volatility than what a single-asset product can offer. Second, they have a deposit-substitution attribute with some similarity to the logic of money market funds and bond funds. By the end of February, among 70 FOF products issued during the year, 62 were debt-oriented hybrid-type FOFs. Most of their investment objectives generally use bonds as the core “base” asset, with relatively lower allocations to equity assets and commodity assets to enhance returns. Compared with money market funds and bond funds, FOF-type products—while controlling volatility—can provide investors with higher returns. From the perspective of product distribution by banks, for investors whose fixed deposits are approaching maturity, debt-oriented hybrid FOFs are a very good alternative investment tool under the current interest-rate environment. Therefore, some leading bank institutions have already laid groundwork in advance: through deep cooperation with fund companies, they have built systematic and branded FOF product matrices to offer investors viable alternative options, such as China Merchants Bank’s “TREE Longying Plan,” and China Construction Bank’s “Longying Plan,” as well as Bank of China’s “Huitou Plan,” etc. Finally, the continuing development of individual pension programs and expansion of the target-pool of products also support this trend. As of the third quarter of 2025, the number of individual pension account holders already exceeded 150 million. Although the individual pension system is still in the early pilot and exploration stage, target-risk FOFs and target-date FOFs are tool-like products designed for pensions. As the system operates and develops steadily, FOF funds will receive a continuous and stable inflow of funds.

Compared with money market, bond, and FOF-type products, stock-type and QDII-type products saw relatively weaker growth in size. Stock funds even experienced negative growth in size, with overall size declining by nearly 80 billion yuan. From the perspective of shares, there was no significant decline in stock fund shares at the end of February compared with the end of January, which suggests that the main cause of the size decline was net value volatility during February. Combined with the fact that off-exchange funds preferred to flow into money market and bond-type funds, this ultimately led to a decrease in stock fund size.

The core drivers behind the size breakout

The core of public mutual fund products is to provide investment value to investors, and that investment value ultimately needs to be reflected in investment returns. Therefore, we believe there are mainly two core drivers behind the steady surpassing of new highs in public mutual fund size: first, an improved market “making money” effect that meets or exceeds investors’ target return requirements for fund investments; second, regarding fund fees, policy coordination with the market, with tangible benefit-sharing to investors. Under the combined effect of these two factors, investors’ overall fund returns improved effectively, supporting investors’ willingness to maintain or increase their interest in public mutual fund products.

From the market “making money” effect, it can be divided into two main sources: first, beta, which represents the overall market environment—i.e., the performance of mainstream broad-based index products and related funds; second, excess returns from active management, meaning the returns of fund products relative to mainstream indices. The former determines whether investors are willing to participate in the capital market, while the latter affects whether investors are willing to invest in fund companies’ investment research and professional capabilities.

Over the past three years, the three major mainstream broad-based indices all declined first and then rose. As of February 2026, the cumulative returns over the past three years for the CSI 300, CSI 500, and CSI 1000 are all positive, at 16.49%, 37.28%, and 24.17%, respectively. Over the past one year, the returns were 18.71%, 41.61%, and 31.71%, respectively. This means that, after the market’s recovery was completed and as a slow bull trend gradually formed while setting new highs in recent years, market participants have been benefiting from the market’s upward beta returns, which provides them with sustained willingness and motivation to participate. At the same time, in terms of market participation, the average daily trading value of the CSI 300, CSI 500, and CSI 1000 over the past year was 446.3 billion yuan, 327.2 billion yuan, and 395.3 billion yuan, respectively; corresponding average daily trading values over the past three years were 317.5 billion yuan, 215.4 billion yuan, and 270.8 billion yuan, respectively. The increases were all above 40%, further confirming a significant improvement in investors’ market participation. From the excess-return perspective, returns of active equity funds in 2025 were about 30%, with a median excess return exceeding 10%. This shows that in a slow bull market environment, active equity funds can better help investors capture upward opportunities and deliver value from active management.

On the fund fee side, it can be divided into fee-cap adjustments at the policy level and autonomous fee adjustments by institutions at the market level. At the policy level, in recent years the CSRC has, in various documents related to public fund fees, adjusted the upper limits on fund transaction fees and sales fees, respectively. The adjustment content is shown in the table below. Under the adjustment of the related fee items, the amount of benefit-sharing to investors each year will reach several tens of billions of yuan. At the market level, fund managers also engage in many proactive fee-reduction actions to further share benefits with investors, enhance their own competitive advantages, attract investors’ capital, and compete for market share. For example, in a recent announcement, Southern Fund stated that, effective April 1, 2026, it will reduce the fee rates for 13 fund products all at once. In addition, the largest cross-border, single-industry ETF—Fubon FTSE Internet ETF (HK Stock Connect Internet ETF) —has also recently announced a fee reduction. The management fee will be reduced from 0.5% per year to 0.15% per year, and the custody fee will be reduced from 0.1% to 0.05%. Based on the current fund size, the annual benefit-sharing from this fee reduction will exceed 300 million yuan. Including this ETF, as of March 26, a total of 47 fund companies have adjusted the fee rates of 422 ETF products under their management. Most of those products will reduce their management fee rates to the industry’s lowest level.

Therefore, the two main drivers of changes in public mutual fund size—institutional investment-return capability and investment cost—both have a positive impact on size growth in the current market environment. This allows investors not only to capture better market upside returns through fund investments, but also to reduce the fee costs they incur during the process of investing in funds, thereby continuously improving investors’ willingness to invest in public mutual funds.

Outlook for the growth trend of public mutual fund size

Although in the short term, due to multiple factors such as the Spring Festival holiday and overseas geopolitical conflicts, the main size growth in February is focused mainly on low-risk and high-liquidity money market funds, over a longer time horizon, while the size of money market funds still maintains steady growth, its growth pace is relatively slower compared with stock-type and bond-type products.

Based on size growth data over the past three years, the three-year average growth rates for stock-type, bond-type, and QDII-type products were 30.37%, 40.58%, and 47.90%, respectively. In particular, in February 2025, the growth rate in stock fund size year over year exceeded 45%, while in February 2026, the growth rates for bond and QDII products year over year exceeded 60%. This also implies that the “crowding into” money market funds observed in February may not be a persistent long-term phenomenon, but more likely a short-term parking behavior in money market funds, waiting for the right time to rotate into other types of fund products. At the same time, because there is still room for further downside in the current interest-rate environment, the yield capability of money market funds may still decline further, which could form some impact on the growth pace of money market fund size.

With the possibility that money market fund size growth may further slow down, there is more room for size growth in ETF products of other types. In particular, bond-type products and the fast-growing “fixed-income plus” FOF products, given their features of low risk, high liquidity, and some upward return potential, are more likely to take over the role previously played by money market funds as deposit-substitute products. Overall, their future size growth is expected to remain stable and continuous. Meanwhile, stock-type products and QDII-type products—which generally have higher return potential and higher volatility—mainly take on the role of realizing investors’ high return expectations. Provided that the market macro environment does not undergo major changes, their size is expected to show a growth trend dominated by volatility and upward movement.

Overall, the consecutive growth in stock, bond, and QDII sizes in recent years, together with the explosive growth of FOF products since the beginning of this year, all reflect that after investors complete the initial “deposit transfer,” i.e., the process of moving from bank deposits to net-asset-based products, they have gradually begun to explore asset allocation approaches such as diversifying assets and diversifying investment regions. This provides momentum for the continued growth of public mutual fund size.

This report is for investment reference only. Past performance of funds does not predict their future performance, nor does it constitute a guarantee of investment returns or investment advice. Some of the materials are compiled from publicly reported news, and there may be inaccuracies in the information. The data in this report come from third-party databases. Different databases have different update cycles, and the completeness of the data and the timing of extraction may be related to each other; therefore, there may be inaccuracies in the data. The fund position estimation results are mainly based on model calculations; therefore, some reasonable assumptions were made about the market and relevant transactions. However, this may lead to conclusions derived from the model that cannot fully and accurately depict actual conditions, and there may be deviations from the real situation. In addition, data sources typically have a very small number of missing values, which may slightly increase statistical bias in the model. Also, the choice of historical data ranges can have some effect on the results.

Title of the securities research report: 《Public mutual fund size first breaks through the 380-trillion-yuan mark》

External release date: March 29, 2026

Report issuing institution: Citic Securities Co., Ltd.

Report analyst(s):

Yao Ziwei SAC No.: S1440524040001

Sun Shiyu SAC No.: S1440524060007

Ying Shaohua SAC No.: S1440525060001

Miao Jinjin SAC No.: S1440525080003

Research Assistant: Xu Chuhan

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