Institution Forecasts Up to RMB 3 Trillion in Fresh Capital Inflows to the Stock Market This Year

Recent data released by the Asset Management Association of China show that, as of the end of December 2025, the total assets under management (AUM) of China’s public mutual fund industry climbed to RMB 37.71 trillion. This marked a month-on-month increase of approximately RMB 695.75 billion and represented the ninth consecutive month of record highs.

According to calculations by reporters from 21st Century Business Herald, total public fund assets expanded by RMB 4.89 trillion over the course of 2025, translating into a robust annual growth rate of 14.9%.

From a full-year perspective, every major fund category recorded positive growth in 2025. Bond funds led the way with a surge of nearly 60%, while equity funds posted a strong increase of 36%, underscoring a broad-based expansion across asset classes.

Total Scale Nears RMB 38 Trillion

The latest figures from the Asset Management Association of China indicate that public fund assets rose from RMB 33.12 trillion at the end of April 2025 to RMB 37.71 trillion by year-end, extending an uninterrupted streak of new historical highs for nine straight months.

Compared with RMB 32.83 trillion at the end of 2024, the industry added RMB 4.89 trillion in assets during 2025 alone, reflecting a powerful acceleration in long-term growth momentum.

As of December 2025, China was home to 165 public fund management institutions, including 150 fund management companies and 15 asset management firms with public fund licenses.

By fund type, money market funds remained the largest category, with assets totaling RMB 15.03 trillion. Bond funds followed at RMB 10.94 trillion, while equity funds reached RMB 6.05 trillion. Hybrid funds, funds of funds (FOF), and other fund types recorded assets of RMB 3.68 trillion, RMB 244.39 billion, and RMB 1.77 trillion respectively.

Clear Structural Shifts in December

December’s data revealed notable structural changes within the industry.

Bond funds emerged as the primary driver of monthly growth, expanding by more than RMB 412 billion. This marked a clear reversal from earlier months that had been influenced by the traditional “equity–bond seesaw” effect.

Equity funds also delivered a strong performance, with assets rising by over RMB 250 billion during the month. At the same time, hybrid funds, FOFs, and QDII funds all recorded varying degrees of growth.

Although the number of shares in hybrid funds declined slightly, their net asset value increased from RMB 3.60 trillion to RMB 3.68 trillion, representing a 4.73% rise. FOFs added more than RMB 8.8 billion in December and have now recorded four consecutive quarters of sequential growth.

Money market funds were the only category to see a modest decline, with assets falling by approximately RMB 153.6 billion amid lower yields and the improving relative appeal of equity investments.

Full-Year Trends Highlight Diversification

Looking at 2025 as a whole, the public fund industry achieved steady overall growth, though development varied by category.

Data from Geshang Fund show that QDII funds expanded by 60.56% over the year, bond funds by 59.79%, equity funds by 35.93%, money market funds by 10.47%, and hybrid funds by 4.73%. These figures highlight a clear trend toward more diversified asset allocation.

Notably, equity-oriented funds continued to regain momentum. Supported by the rapid expansion of ETFs, equity fund assets have maintained an upward trajectory since 2023. Hybrid funds also reversed the prolonged contraction seen since 2022.

Industry observers widely agree that the structural recovery of equity assets is gaining strength.

Geshang Fund researcher Guan Xiaomin noted that improving equity market conditions are drawing fresh inflows into equity funds, particularly index-based products, while demand for overseas asset allocation continues to rise.

Zeng Fangfang, head of public fund product operations at Paipaiwang Wealth, summarized three defining characteristics of the 2025 fund landscape. First, tool-based and multi-asset funds led growth, with ETF assets nearing RMB 6 trillion and strong gains across bond, FOF, and commodity funds. Second, structural divergence became more pronounced, with equity fund growth outpacing pure bond funds. Third, industry concentration continued to increase among leading institutions.

Industry Assets May Approach RMB 40 Trillion

The sustained expansion of public fund assets is widely seen as evidence of the ongoing “migration of deposits” toward capital markets.

Industry AUM has grown from RMB 9.1 trillion at the end of 2016 to RMB 37.71 trillion by the end of 2025, representing an average annual growth rate of roughly 16%.

According to a research report from Huaxin Securities, incremental funds flowing into the A-share market in 2026 could reach around RMB 3 trillion, with public funds potentially contributing nearly RMB 877.3 billion of that total.

Analysts suggest that if public fund assets maintain a medium-term growth rate of 10% to 15%, total industry AUM could approach the RMB 40 trillion milestone in 2026.

Guan Xiaomin expects the steady growth trend to continue, with equity funds, “fixed income plus” strategies, QDII funds, commodity funds, and FOFs remaining key beneficiaries of investor attention.

She added that in a low-interest-rate environment, “fixed income plus” funds—offering both stability and moderate flexibility—are increasingly becoming core alternatives to traditional bank wealth management products. Meanwhile, rising demand for overseas assets and commodities such as gold is set to further support the development of related fund categories.

Looking ahead, Geshang Fund researcher Tuo Hejiang believes that investment opportunities in 2026 will continue to center on technology themes, global expansion strategies, and high-quality, high-dividend core assets.

Market institutions broadly expect the transformation of wealth management to continue, with both equity and bond markets offering structural opportunities in 2026.

Zeng Fangfang projects that public fund assets will maintain steady growth next year, alongside deeper trends toward indexation and diversification. Tool-based funds are expected to keep expanding, while active equity funds may regain favor as fundamentals improve. FOFs and commodity funds are also likely to grow, supported by evolving market styles and allocation needs.

From a broader market perspective, Morgan Asset Management China’s Senior Global Market Strategist Zhu Chaoping noted that improving corporate earnings could underpin equity markets in 2026. However, elevated valuations and geopolitical uncertainties remain key risks. He advised investors to moderate return expectations and adopt diversified allocations to manage volatility. In terms of strategy, he highlighted high-growth core A-share assets and overseas expansion themes, while on the fixed-income side, he pointed to the continued yield advantages of overseas bonds—particularly short-duration government bonds in developed markets as the pace of rate cuts slows.