A small, high‑profile mutual fund run by Eastmoney Fund has suffered a sharp early‑year slump, exposing deeper weaknesses in the asset manager that sits under one of China’s largest retail brokerages. The Dongcai Value Qihang Mixed (launch A share 018096.OF), launched in 2023 as an initiated fund, lost close to 20% in the first two and a half months of 2026 and now ranks second‑to‑last among China’s mixed‑equity funds.
The fund’s three‑year record is worse still: cumulative losses approaching 30% since inception versus a benchmark gain of 18.1% and a mixed‑fund peer index rise of 22.8%. Its performance stands in stark contrast to a long, structure‑led bull market in which the CSI 300 has advanced roughly 16% over the same period. The result is a cautionary example of how access to heavy retail flows does not automatically translate into investment success.
Performance problems have coincided with frequent changes in portfolio leadership and an erratic investment approach. The fund has had two managers in less than three years; the initial manager presided over a near‑14% drawdown, and the incumbent has posted a 24% loss since taking charge in February 2025. The portfolio repeatedly shifted “hot” sector bets within 2025 — rotating between AI and semiconductors, defence and digital economy themes, a solar‑value‑chain concentration, and finally lithium and other new‑energy metals — and those high‑conviction switches failed to capture consistent gains.
Quarterly results in 2025 underscore the missed calls: a weak start of -8.9% and -2.0% in the first half, followed by modest recoveries of 5.3% and 6.1% in the second half, with only the fourth quarter clearing the CSI 300. The pattern points to “chase the theme” stock picking and timing errors rather than a durable, process‑driven investment discipline.
Eastmoney Fund’s trouble with equities is not confined to a single product. The firm’s 11 mixed funds have generally underperformed since launch and attract little market attention; their aggregate scale sits around ¥8 billion, with several funds under the minimums that trigger liquidation consideration. By contrast, the company’s total assets under management ballooned to ¥576 billion by end‑2025, but this growth was overwhelmingly debt‑fund driven.
Fixed‑income products account for roughly 72% of the firm’s assets — about ¥420 billion — and the expansion is heavily concentrated in a single bond vehicle, Dongcai Ruili Bond, which holds ¥353 billion or more than 60% of total AUM. Institutional investors hold 99% of its A‑share class, creating a concentration and liquidity profile that ties the firm’s fortunes to one product and a handful of clients.
Leadership turnover compounds the structural imbalance. Eastmoney Fund has had four chief executives in under seven years: an industry veteran who left after 18 months, a sales‑oriented executive recruited to monetise distribution who lasted about a year, a longer‑serving manager who grew scale during a bond rally but left amid questions about concentration, and a new CEO who has been on the job for less than a year. The rotating skill sets — investment veteran, distribution specialist, scale operator — have not produced a sustained improvement in active equity capability.
The firm’s predicament highlights a broader dilemma facing brokerage‑backed asset managers in China: plentiful retail flows and digital distribution can accelerate scale, but without robust investment teams and disciplined processes those flows can amplify missteps. For Eastmoney’s parent, the reputational cost of a prominent product underperforming so dramatically may complicate cross‑selling and will attract scrutiny from institutional partners looking for durable alpha rather than marketing‑driven asset gathering.
For investors and the market at large the immediate risks are concentration and governance. Heavy dependence on a single bond fund exposes Eastmoney Fund to redemption pressure or performance reversals that would disproportionately affect its business. Building a credible equity capability will require stable investment leadership, a coherent research process, and a willingness to cede short‑term distribution growth in favour of long‑term credibility — a difficult trade‑off for a firm that has prospered by monetising retail traffic.