37.77 trillion! Public funds set a new record for 10 consecutive months, with FOF and QDII becoming the new favorites

Source: 21st Century Business Herald Author: Pang Huawei

On February 27, the Asset Management Association of China released a set of impressive data: as of the end of January this year, the total size of public funds exceeded 37.77 trillion yuan, hitting a new high for ten consecutive months and remaining above 37 trillion yuan for three months in a row.

What does this number mean? It’s equivalent to 27% of the national GDP in 2025. At the same time, the public fund size has grown 3.5 times over the past decade.

It’s worth noting that behind the overall growth, a quiet “big shift” in fund structure is also underway.

FOF, QDII, and others are becoming new favorites

In January, the public fund market staged a “song of ice and fire.”

Stock funds and bond funds both “cooled down.” Stock fund size shrank by 343.8 billion yuan in a single month, while bond funds shrank by 405.2 billion yuan. The former set a record for the largest single-month decline in stock ETF size, and the latter experienced a “stock-bond seesaw” effect.

The “giant” broad-based ETFs became a retreat zone. Wind data shows ETF size plummeted by 559 billion yuan in January, a decrease of 9.29%. Industry insiders believe the reason is that broad-based ETFs have experienced continuous large outflows this year.

On the flip side, mixed funds and money market funds continued to “absorb capital,” along with FOFs and QDIIs enjoying a frenzy.

Mixed funds attracted 330.2 billion yuan in a single month, earning the title of “capital magnet,” closely related to the continued popularity of “fixed income +” strategies; money market funds steadily added 237.9 billion yuan, continuing to serve as “safe havens” for funds; meanwhile, FOFs (funds of funds) grew at a month-on-month rate of 15%, making them the most eye-catching in January; QDII funds first broke through the 1 trillion yuan mark, reaching 102.65 billion yuan, with a 4.58% month-on-month growth, and a ten-year increase of over 14 times.

In the past year, FOFs have suddenly become popular.

“A lot of FOFs are selling very well recently. We’ve launched several blockbuster products,” said a bank wealth management manager.

Data confirms this. In January, the size of FOFs surged by 36.785 billion yuan month-on-month, with a 12.68% increase in share, and a 15.05% growth in size, leading among all fund types.

Who is behind this trend? Major commercial banks like China Merchants Bank and China Construction Bank.

Insiders reveal that China Merchants Bank has prioritized FOFs as a key development area since last year, followed closely by China Construction Bank, with other banks quickly catching up. With strong support from bank channels, FOFs are moving from “niche products” into the mainstream view.

“The essence of FOFs is having professionals select funds for you,” said a fund analyst. “It’s like you don’t want to cook yourself, so you go to a reliable restaurant where the chef arranges a meal for you.”

As the stock market recovers, FOFs are replacing some bank wealth management products. The “lazy investor” advantage of FOFs is being further amplified—by 2025, the average return of the entire market’s FOFs is nearly 13%. Among them, the Wind hybrid equity FOF index has achieved nearly 26% return.

If FOFs are “internal allocation,” then QDII is “looking globally.”

In January, QDII funds broke through the 1 trillion yuan mark for the first time, reaching 102.65 billion yuan. Over ten years, from 66.2 billion yuan at the end of 2015 to today’s trillion-yuan scale, QDII has grown more than 14 times.

“Previously, when clients asked how to invest in U.S. stocks, I had to explain about QDII quotas and foreign exchange controls for a long time; now they directly ask ‘which is better, Nasdaq ETF or S&P 500 ETF,’” said a channel professional, highlighting investors’ increasing awareness of global allocation.

By 2025, the Nasdaq index is expected to rise by 20%, the Nikkei 225 by 26%, and the KOSPI by 76%… The earning potential of overseas markets is making more investors favor “looking globally.”

Ten years of rapid growth: 3.5 times

If we look at a longer timeline, the growth trajectory of public funds is astonishing.

At the end of 2015, the total size of public funds was only 8.4 trillion yuan; today, that number has grown to 37.77 trillion yuan, a 3.5-fold increase. In just 2025 alone, it grew by 4.89 trillion yuan, equivalent to an increase of 134 million yuan per day.

Behind this are three clear main trends: first, under the “housing is for living, not for speculation” policy, residents’ wealth has shifted from the real estate market to financial assets; second, the stock market has recovered, boosting fund profitability; third, after the new asset management regulations, the advantages of net value products have gradually become apparent.

Huaxin Securities predicts that in 2026, potential incremental funds in public funds will be about 877.2 billion yuan. If the growth rate remains at 10% to 15% in recent years, the era of 40 trillion yuan in public funds may be just around the corner.

The big shift in funds reflects institutional expectations for the future market.

Yang Delong, head of Qianhai Kaiyuan Fund, said: “There are many opportunities in A-shares and Hong Kong stocks in the Year of the Horse. After the Spring Festival, tech stocks have already taken the lead, and more sectors will rotate into the spotlight. ‘The whole year depends on spring,’ now is a good window for strategic positioning.”

Yang Delong believes that technology remains the main theme, with sector rotation following the order of “small first (tech stocks), then medium (new energy, military industry, non-ferrous metals), and finally large (consumer blue chips).” He recommends investors build a balanced portfolio, such as allocating one-third of their holdings to tech stocks, one-third to medium-sized stocks, and the remaining third to large-cap stocks to achieve a balanced attack and defense.

Zhang Xia, chief strategist at China Merchants Securities, pointed out that given the good profitability of A-shares over the past two years and the current scarcity of medium- and high-yield assets, the supply and demand for A-shares in 2026 are expected to continue large-scale net inflows, possibly reaching 1.56 trillion yuan. He believes that public fund issuance will continue to recover, and if the key resistance to turning losses into profits can be broken effectively, the issuance of public funds will significantly improve, and active funds’ redemptions are also expected to see notable improvement.