For years, Hu Zhongyuan was the golden boy of Huashang Fund, a manager celebrated for his tactical agility and an uncanny ability to time the volatile A-share market. Since 2019, he consistently outperformed his peers, building a reputation as a 'star' who could navigate China’s shifting economic tides. However, as 2026 unfolds, that reputation is being tested by a dramatic performance collapse that has seen his funds plunge to the bottom of national rankings.
The primary culprit appears to be the sheer weight of his own success. Hu’s assets under management (AUM) exploded from a modest 1.6 billion yuan in 2019 to over 40 billion yuan by 2025. This rapid expansion has fundamentally broken his investment framework, transforming a nimble, alpha-seeking strategy into a cumbersome vehicle that struggles to find enough high-quality targets to absorb its massive liquidity.
Evidence of this struggle surfaced in his flagship Huashang Runfeng Fund. As the fund swelled to 13 billion yuan, Hu was forced to park significant capital in low-yield repo markets and government bonds—essentially 'eating interest' rather than investing in equities. When he did deploy capital, the sheer size of his positions often made him a top-ten shareholder in several companies, severely limiting his ability to exit positions without triggering a price collapse.
Compounding these structural issues was a disastrous tactical bet on the aviation sector in the first quarter of 2026. Hu pivoted heavily into China’s major carriers, including Air China and China Southern, just as geopolitical tensions and surging global oil prices created a perfect storm for the industry. This concentrated exposure, coupled with high exit costs for a hundred-billion-level portfolio, has left his investors trapped in a downward spiral of declining net asset values.
Critics also point to Huashang Fund’s questionable management of its star manager’s brand. In 2025, the firm removed Hu from several underperforming bond funds in what looked like a face-saving cleanup operation. Yet, shortly after, they launched a new 'Fixed Income+' fund under his name. This move appeared more focused on capitalizing on his fading celebrity to raise fresh capital than on protecting investor returns, a strategy that has backfired as the new fund now sits near the very bottom of its category.