AI sector transitions from concept narrative to commercial realization, some high-performing funds' net values "change appearance"

Securities Times Reporter Zhao Mengqiao

As the first quarter comes to an end, the “profit and loss are from the same source” scenario in fund investments is playing out again. Some high-performing funds that performed well during last year’s “tech bull” market have experienced net value declines due to market shifts. For example, several products heavily invested in the robotics sector have seen double-digit withdrawals this year.

Against the backdrop of some concentrated funds beginning to loosen their holdings and gradually switch between high and low positions, the risks of betting on single-sector strategies are fully exposed. While technology stocks remain the main focus, some fund managers point out that as we enter the “Darwin moment,” market perception of tech stocks needs to shift from “concept narratives” to “commercialization realization” and “technological implementation certainty.”

Multiple high-performing funds have “changed faces” this year

So far, some actively managed equity products have widened their performance gaps, and the sustainability of last year’s top performers has become a market focus.

The Securities Times notes that many funds that lagged this year are exactly those that shined last year. For example, a fund under a mid-sized public fund in North China heavily invested in humanoid robot industry chains last year. Benefiting from related market rallies, its net value surged by 99.27%, nearly doubling.

Since the beginning of the year, as the robotics theme waned and related stocks sharply corrected, the fund’s net value has fallen approximately 23%, making it the top decliner of the year so far. Additionally, two funds under South China public fund companies, heavily invested in robotics, have also fallen more than 20%.

Looking back at last year’s spectacular “tech bull,” most tech stocks enjoyed valuation premiums. AI computing chips, low-altitude satellites, and the humanoid robot theme funds recorded returns of 50% or even doubled. Due to the significant profit effects, capital flooded into these high-valued concept stocks in the second half of last year, leading many funds to experience explosive growth at their performance peaks.

However, with the market shifting rapidly in 2026, these popular stocks from last year faced valuation and logical double whams, causing many top-performing funds to perform modestly this year, with some “double-up” funds experiencing declines of over ten percent.

Analysts suggest that the main reason is that last year’s outstanding funds mostly adopted an extreme single-sector strategy. While this approach maximized flexibility during upward markets through concentrated holdings, it lacked defensive features, making it a major driver of declines during market adjustments.

“Profit and loss come from the same source; it’s the simplest yet most brutal rule in investing,” said a fund manager in North China.

Technology stocks remain the main theme

Although geopolitical conflicts initially led the performance rankings this year, with energy and non-ferrous metals themes dominating, the funds that stand out now are still largely centered on technology themes.

As of March 20, GF Vision Intelligent Choice led with over 49% gains. At the end of last year, its top holdings were all storage concept stocks. Additionally, funds like China Life Anbao Digital Economy, China Life Anbao Industrial Upgrade, and Red Soil Innovation New Technology, which all gained over 30%, also invested heavily in related tech stocks.

“Looking at early 2026, the A-share technology sector is undergoing a structural transformation,” said Tang Xiaobin, a fund manager at GF Fund. “If 2023–2025 was a ‘big explosion’ of AI technology, with noise and chaotic competition, 2026 may mark the ‘Darwin moment.’”

Xu Chengcheng, a fund manager at Industrial Securities Fund, believes that the future development of tech styles depends on the mutual confirmation of industry growth trends and actual performance realization. The performance certainty within the tech industry is expected to become a core clue for 2026 tech-themed investments.

He further states that, taking artificial intelligence as an example, market perception has shifted from “concept narrative” to “commercialization realization” and “technological implementation certainty,” with significant differentiation within the sector. Amid overall high valuation levels, capital is increasingly focusing on niche segments with real profitability, independent control, and global competitiveness.

Guo Weiling, a fund manager at Dacheng Fund, also predicts that the tech market in the first half of 2026 will likely continue, mainly revolving around AI, but with more structural opportunities than overall market gains. Overall investment difficulty will be higher than in 2025.

Investors should pay attention to “crowding”

It is noteworthy that during last year’s tech bull market, many value-oriented funds that emphasized “stability” also couldn’t resist including related assets like computing power and robotics. Driven by the AI supercycle logic, valuations of leading tech stocks soared to historic highs.

However, the investment logic for tech stocks will ultimately shift from “vision-driven” to “profit verification.” Early this year, concerns about “AI capital expenditure realization lagging expectations” emerged, and the high price-to-earnings ratios became a sword of Damocles hanging over fund net values. As the Federal Reserve’s rate-cutting pace fluctuates and the global AI industry chain enters a “cost pain period,” this high premium is experiencing a sharp mean reversion. The declines in robotics stocks and the sluggish performance of PCB and CPO sectors are examples.

Moreover, when profits attract large capital inflows into these sectors, the degree of position convergence also rises. Besides valuation factors, trading crowding is a key driver of performance reversals.

Data shows that in December last year, the daily trading volume of the CSI TMT Index remained between 200 billion and 250 billion yuan, far surpassing other sectors like consumer, cyclical, and financial, becoming the main driver of A-share trading.

Research reports indicate that institutional large-scale increases in tech sector holdings have come at the expense of reduced allocations to consumer and financial sectors, which have fallen to their lowest levels since 2010. The trend of capital shifting from traditional sectors to tech has further increased the crowding in tech stocks.

A fund manager from a Shenzhen public fund told Securities Times that once market sentiment shifts, institutional funds will inevitably reduce holdings of previously hot stocks to rebalance or reposition. In an environment of shrinking buying activity, this collective retreat can easily trigger a “stampede effect.”

“The logic behind last year’s rise was very solid, so this year’s decline is just as fierce,” the manager added. The recent surge in “HALO” assets is ultimately a result of the past two years’ gains in the AI sector outpacing the broader market, prompting funds to seek more cost-effective targets—when risk appetite decreases, these funds mainly hunt for companies with strong moat and irreplaceable operational advantages.