New Equity Funds Post Steep Drawdowns; Guotai Haitong New Energy Fund Down Over 42%

Since July 2026, A-share market volatility has intensified, with the technology sector undergoing a sharp correction. Multiple equity funds established after May have suffered notable net value drawdowns. Some theme products, launched less than two months ago, have seen net value declines exceeding 40%, with unit net values falling below RMB 0.50. A considerable number of newly established equity funds have also recorded net value declines of more than 20%.

As of August 4, the Guotai Haitong New Energy Ruixuan A fund had fallen more than 42% since inception, with unit net value at RMB 0.5754. The fund was established on June 16, and its performance benchmark comprises the CSI Inland New Energy Theme Index, the ChinaBond Composite Full Price Index and the CNI HK Stock Connect New Energy Index. According to the fund's second-quarter report, A-share and Hong Kong stock positions stood at 89.37% and 4.74% respectively as of end-June, with holdings concentrated in the lithium battery, solid-state battery and copper foil sectors. The top ten holdings - Defu Technology, Tongguan Copper Foil, Sinocera Materials, Taijin New Energy, Jiaocheng Ultrasonic, Jiayuan Technology, Nord, Hailiang, Han's Laser and Fangbang - together accounted for more than 66% of the portfolio. Since July, heavy positions including Fangbang, Defu Technology and Taijin New Energy have seen sharp share price adjustments, with the fund's net value at one point falling more than 10% in a single day.

During the same period, multiple technology-theme index funds established since May have also faced net value declines. ETFs tracking the SSE STAR Market Chip Design Theme Index, the CSI Battery Theme Index, the SSE STAR Market 200 Index and the CSI Rare Metals Theme Index have all fallen more than 20% since inception. New funds typically build their portfolios gradually within the period stipulated in the fund contract. With the recent rapid shift in market style and the concentrated correction in technology growth sectors, the net values of related products have come under periodic pressure.

Some funds disclosed their position-building arrangements in second-quarter reports. The manager of the Great Wall Zhiyue Balanced Fund said the product adopted a prudent approach to position building, gradually increasing exposure amid market adjustments, and had largely completed the core construction phase. The manager of the Yongying Zhiyuan Growth Fund noted that the product was established in mid-to-late May, coinciding with a period of elevated market volatility, and that position building proceeded cautiously at market lows to seek a more favourable margin of safety. As of the reporting period, the net value of the Guotai Haitong New Energy Ruixuan A fund had fallen substantially more than the drawdown of its performance benchmark over the same period, reflecting the impact of concentrated holdings on net value volatility.