As China’s A-share market enjoys a period of sustained momentum, fueling growth for the majority of public fund providers, SWS MU Fund Management is emerging as a stark outlier. While competitors leverage the bull market to expand their scale and performance, this veteran firm is struggling with a series of internal and external crises. From recurring labor disputes to the spectacular performance collapse of its high-priced star managers, the firm finds itself in a state of strategic paralysis.
Internal management pressures have become increasingly visible through a series of legal battles. The firm is set to face a labor contract dispute in court in mid-2026, marking the second time the same employee has sued the company in less than a year. These legal frictions coincide with a troubling financial trajectory, as SWS MU reported a 7.8% drop in net profit for 2025, marking the third consecutive year of declining earnings during a period of broader market prosperity.
The firm’s equity division is facing particular scrutiny following the disastrous performance of star manager Jia Chengdong. Despite being recruited at a high cost to revitalize the firm’s offerings, Jia’s funds have plummeted to the bottom of industry rankings, with some losing over 18% since inception. Market participants and even employees from the firm's parent group have criticized Jia’s 'gambling' style, noting a pattern of chasing high-valuation sectors only to sell them during subsequent crashes.
Structural anomalies are also appearing in the firm’s fixed-income portfolio. A flagship 3-billion-RMB bond fund has repeatedly issued liquidation warnings because it cannot maintain the regulatory minimum of 200 individual holders. This 'deformed' structure, where massive institutional 'placeholder' capital exists without a retail base, highlights a profound lack of trust from the general public and suggests the firm is reliant on artificial scale to remain relevant.