11 liquidations this year, these retirement-focused FOFs are the first to "retire"

Retirement FOFs are seeing a new round of concentrated liquidations.

Wind data shows that as of March 29, within this year 11 retirement FOFs have been liquidated (counted by the liquidation end date, and only the initial funds are included), involving public fund institutions such as China Europe, HuAn, Industrial and Commercial Bank of China-Ruixin, and others—6 fund management companies in total. This figure is already close to last year’s full-year 14 liquidations, and the liquidation pace has clearly accelerated.

A person from the public funds sector told First Financial that, in terms of the holder structure of retirement FOFs, the proportion held by institutional investors is generally high, and in some products the share of institutional funds exceeds 90%. Once institutional funds concentrate and redeem, the product size quickly falls below the liquidation threshold, making liquidation an inevitable outcome.

The liquidation pace is accelerating

Specifically, within this year, retirement FOF products whose liquidation has concluded within less than 3 months have reached 11. Compared with 12 and 14 liquidations for the full years of 2024~2025, the liquidation pace has clearly accelerated.

“Growing up late” remains a major problem in the development of retirement FOF products. These products were mainly established in the 2022 to 2023 period, and the reasons for liquidation are all that the contract termination clause was triggered when their size was insufficient to meet the condition of failing to reach 200 million yuan three years after establishment.

Specifically, the most recent batch of retirement FOFs officially “retired” are three products from Yingda Fund: Yingda Yanfujia Retirement 2035 Three-Year Holding, Yingda Yanfujia Retirement 2055 Three-Year Holding, and Yingda Yanfujia Retirement 2060 Three-Year Holding. All three began liquidation on March 2 and concluded liquidation on March 11. As of the last disclosed net value day on February 27, 2026, the cumulative return rates since these three FOFs were established were 10.37%, 4.9%, and 15.25%, respectively.

Within this year, there are also three retirement FOFs that “retired,” including those managed by China Europe Fund. Specifically, China Europe Expected Retirement Target 2045 Three-Year Holding A and China Europe Expected Balanced Retirement Three-Year Holding A began liquidation on January 2, 2026, while China Europe Expected Retirement 2055 Five-Year Holding A began liquidation at the end of 2025. During the existence periods of these three products, all were managed by only one fund manager, Deng Da.

At the end of the third quarter of 2025, Deng Da first entered the ranks of fund managers managing 10 billion yuan (RMB) and above. He is also the only fund manager in this batch of 11 retirement FOF products with that scale.

In addition, HuAn’s Expected Retirement 2050 Five-Year Holding and HuAn’s Expected Retirement 2035 Three-Year Holding were both liquidated in succession in January this year, managed solely by fund manager He Yizhi.

Institutional funds are a “double-edged sword”

Because the share held by institutions is too high, once the funds “fully exit,” retirement FOFs can only face the liquidation outcome.

For example, since their establishment, the institutional holding ratios of the two FOFs HuAn Expected Retirement 2050 Five-Year Holding and HuAn Expected Retirement 2035 Three-Year Holding have remained around 99%; during the fund’s existence period, the institutional holding ratios of Industrial and Commercial Bank of China-Ruixin Positive Retirement Target Five-Year Holding and Penghua Retirement 2040 Five-Year Holding were 95% and 67%, respectively. In addition, for China-U.S. alliance Anrui Positive Retirement Five-Year Holding, in the first half of 2024 and 2025 the institutional holding ratio was both above 58%; from the full year of 2023 to the first half of 2024, the institutional holding ratio was both above 70%.

Worth noting is that retirement target FOF products, at the outset of their design, generally used institutional funds as “seed funds” to leverage issuance. This model played an important supporting role in the early stage of product establishment, but it also planted hidden risks for subsequent liquidations.

“Institutional funds seek stable investment returns and liquidity management. Once the product’s performance falls short of expectations, or the institution adjusts its own asset allocation direction, concentrated redemptions are likely to occur.” A person in charge of investments at a Shanghai private fund told First Financial, “For products that are already relatively small in size, the exit of institutional funds is often the ‘last straw that breaks the camel’s back.’”

Industry insiders believe that the concentrated liquidation of retirement target FOFs does not mean failure of this product type; rather, it reflects the industry ecosystem’s self-optimization. As the personal pension system is fully rolled out, retirement target FOFs, as an important allocation tool in the third pension pillar, still have broad room for long-term development.

“The liquidation mechanism helps eliminate products that lack market competitiveness, concentrating resources on managers who have the ability for ongoing management and brand influence.” The aforementioned investment executive believes that, in the future, the development of retirement FOFs will place even more emphasis on investor companionship and the accumulation of long-term performance. A model that relies solely on institutional funds to “support scale” is hard to sustain.

(This article is from First Financial)

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Responsible editor: Song Yafang