Hybrid Funds Shrink by Over 120 Billion! Does Fuguo Fund Struggle to Maintain Its "Equity" Glory?

Questioning AI · Poor performance of star fund managers, does it reflect strategic transformation difficulties?

Fullgoal Fund, one of the leading public fund management companies in China.

Because its headquarters are located in “Magic City” Shanghai, Fullgoal Fund is also known in the industry as the “Number One Public Fund in Shanghai.”

In recent years, Fullgoal Fund has performed relatively steadily, with managed assets steadily growing. As of March 13, 2026, the total management scale was 1,320.57 billion yuan, nearly doubling from 685.518 billion yuan on March 31, 2021, over five years. (Data source: Tiantian Fund)

However, although the total management scale has been increasing, this mainly relies on the rapid development of index funds in recent years, while the performance of the once-strong active funds has been disappointing.

Take mixed funds as an example. As of March 5, 2026, the scale of Fullgoal’s mixed funds was 167.81 billion yuan; on December 31, 2021, it was 288.931 billion yuan. In other words, over four years, the scale of Fullgoal’s mixed funds decreased by more than 120 billion yuan, which is clearly not very optimistic.

As a former “big player in equity,” Fullgoal Fund has star fund managers like Zhu Shaoxing and Fan Yan. Plus, with the recent rebound of A-shares, why has Fullgoal Fund underperformed expectations?

“Number One Public Fund in Shanghai”

Fullgoal Fund was established in 1999 and is one of the first ten fund management companies in China.

In 2003, Fullgoal Fund decided to introduce the Bank of Montreal (Canada) as a strategic shareholder, making it the first among the first ten domestic fund companies to have foreign investment participation.

In shaping its investment research culture, Fullgoal Fund early on established the philosophy of “research-based, downplaying timing, balanced allocation.” In 2004, it launched the “Fullgoal Tianyi Value Fund,” which became its signature product. Despite alternating bear and bull markets during its issuance, Fullgoal Tianyi achieved top performance among peers for three consecutive years from 2004 to 2006 by adopting a strategy of “high position, concentrated stocks, long-term holding.” According to Lipper statistics, the fund’s returns in 2005 and 2006 ranked first in Asia and fourth globally.

However, for Fullgoal Fund, this was just the beginning. The real foundation of its status as a “big player in equities” was laid after Chen Ge became general manager in 2014.

Data shows that Chen Ge started in the securities industry in December 1996, working as a researcher at Guotai Junan Securities Research Institute. In October 2000, he joined Fullgoal Fund Management Co., Ltd., serving as researcher, research department manager, fund manager, assistant general manager, and deputy general manager. From April 13, 2005, to April 14, 2014, Chen Ge managed the Fullgoal Tianyi Value Fund, with a total return of 362.16% and an annualized return of 18.52%. Due to excellent performance, Chen Ge was appointed general manager of Fullgoal Fund in January 2014.

Under the management of such an investment-savvy “expert,” Fullgoal Fund cultivated a culture of deep respect and inclusiveness for investment research talent. Media reports indicate that the management does not impose uniform investment styles on fund managers but requires “in-depth research, bottom-up approach, respect for individuality, and long-term returns.” This open and inclusive culture helped Fullgoal Fund experience a collective breakout in the bull market after 2015, with many fund managers delivering impressive results, solidifying its position as a “big player in equities.”

From 2019 to 2021, the “institutional crowding” trend in A-shares gradually took shape, and Fullgoal Fund’s active equity management scale reached a historical peak, with mixed funds reaching 288.931 billion yuan. At that time, Fullgoal not only secured its position as a leading public fund in Shanghai but also narrowed the gap with top players like China Asset Management and E Fund.

In 2022, as the “crowding” trend gradually unraveled, Fullgoal Fund began to fall from its pedestal.

From the perspective of fund managers, after 2022, many of Fullgoal’s fund managers underperformed, including some highly renowned star managers.

Take Zhu Shaoxing as an example. As the core figure of Fullgoal Fund, Zhu Shaoxing managed the Fullgoal Tianhui Growth Hybrid (LOF), which is considered a legend in the industry. He started managing this fund in 2005, a rare “long-term craftsman.” But after 2021, the performance of Tianhui declined sharply. Data shows that from 2021 to 2024, the annual returns were 0.53%, -23.9%, -9.83%, and 1.23%, nearly every year underperforming the peer average, and in 2022 and 2024, even underperforming the CSI 300 index.

Latest data as of March 17 shows that the three-year, two-year, and one-year returns of Tianhui were 8.24%, 23.13%, and 17.5%, respectively, while peer funds achieved 22.26%, 43.96%, and 26.35% in the same periods. Clearly, Tianhui underperformed its peers across all these periods. Due to poor performance, the fund’s scale has been shrinking. As of Q4 2025, Tianhui’s scale was 21.102 billion yuan, down from a peak of 40.852 billion yuan in Q2 2021.

“Switching to Index Funds”

Although active equity funds have underperformed, Fullgoal Fund’s total managed assets have continued to grow steadily in recent years.

Tiantian Fund data shows that as of March 13, 2026, the total management scale was 13,205.7 billion yuan, nearly doubling from 6,855.18 billion yuan on March 31, 2021, over five years. The key driver of this growth is the rapid expansion of index funds.

Statistics indicate that in recent years, Fullgoal’s index fund scale has grown rapidly. As of February 5, 2026, it reached 3,255.83 billion yuan. To put this in perspective, at the end of Q1 2021, the index fund scale was only 644.14 billion yuan—now it has increased fivefold. In Chen Ge’s New Year message in 2026, he mentioned that Fullgoal is “continuously strengthening research capabilities in equities, fixed income, and quantitative platforms,” “improving the layout of passive and active products,” and “continuously enriching products like Sci-Tech Innovation Bond ETFs that serve technological innovation.” It is clear that the company’s focus has shifted toward index funds.

However, while the rapid expansion of index funds has offset the decline in mixed funds, fully betting on index funds also carries risks.

First, index funds are highly homogeneous, which is a common industry problem. The essence of index funds is standardized beta tools, which naturally tend to “winner-takes-all.” Morningstar’s Sun Heng pointed out that investors tend to prefer larger, more liquid products tracking the same index because they offer lower impact costs and easier entry and exit. Under this mechanism, leading broad-based ETFs’ scales tend to snowball, and without significant differentiation, it’s hard for newcomers to challenge the established order.

Statistics show that by the end of 2025, the total ETF scale in China exceeded 6 trillion yuan, with 1,381 products, ranking first in Asia and becoming a core tool for retail wealth management. But as the scale grows rapidly, competition among index funds intensifies, and “involution” is unavoidable. For example, the CSI 300 ETF market has over 20 products tracking the index, but only a few, like those from China Asset Management and Huatai-PineBridge, have scale and liquidity advantages. Fullgoal’s ETF presence in this space is relatively weak.

Moreover, homogenization has led to fierce price wars. Recently, many leading public fund companies have cut ETF management fees, with the “floor” often at 0.15%. Fullgoal faces significant pressure.

Besides the homogenization issue, Fullgoal’s own weaknesses in index fund layout are evident.

Looking back at the development history of Fullgoal’s index funds, its strengths have been in “enhanced index” and sector-themed ETFs, rather than core broad-based products like CSI 300 or CSI 500. This strategy originated from Dou Yuming’s judgment: if they can outperform the index by four or five points annually, they can attract investors. But the reality has fallen far short. The effectiveness of enhanced index strategies varies and is unstable, making it hard to build long-term trust. Meanwhile, with the proliferation of ETFs, more capital is flowing into lower-cost, more transparent passive products.

As of January 2026, the total ETF scale of China Asset Management exceeded 1 trillion yuan, followed by E Fund and Huatai-PineBridge with 858.6 billion yuan and 596.2 billion yuan, respectively. The top five public fund ETFs account for over 53% of the total. While Fullgoal has performed well in niche areas like Hong Kong Stock Connect internet ETFs, its presence in the most scale- and brand-sensitive broad-based tracks is weak. Moving forward, as leading public fund companies improve their niche layouts, Fullgoal will face serious challenges.

In summary, from once being a “big player in equities” to now a “dark horse” in index funds, Fullgoal Fund is undergoing a profound strategic transformation. But under the backdrop of severe homogenization and fierce competition, successfully transforming will not be easy.

Author’s note: Personal opinions only, for reference.