The "extreme clustering" of public funds: In Q2, the electronics and transportation industries accounted for as much as 60%, and the proportion of the STAR Market reached a record high.

The "extreme clustering" of public funds: In Q2, the electronics and transportation industries accounted for as much as 60%, and the proportion of the STAR Market reached a record high.

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Zhang Kun, once famous for his heavy positions in liquor stocks, significantly reduced holdings in "Mao Wu Lu Fen" in the second quarter and switched to semiconductor and optical communication—this iconic shift reflects the overall drastic change in public fund portfolio styles in Q2 2026.

According to CITIC Securities Research Report, by the end of Q2 2026, the proportion of active equity-biased funds held in the electronics sector rose to about 43%, and about 17% in the communications sector, totaling nearly 60%, both reaching new highs since 2015; the proportion of STAR Market stocks in top holdings surged 9.75 percentage points over the last quarter to 26.42%, also a historical peak. Meanwhile, the proportion of food & beverage holdings fell below 2%, and liquor and other consumer tracks saw a comprehensive withdrawal.

At the individual stock level, Zhongji Xuchuang’s portfolio market value increased by about 89.1 billion yuan to 161.8 billion yuan, maintaining its position as the largest holding; New Yi Sheng increased holdings by about 66.3 billion yuan, rising to second place; Cambricon, Dongshan Precision, GigaDevice, NAURA, Sanhuan Group, etc. all saw increases of over 30 billion yuan.

This round of portfolio migration happened as the A-share market witnessed technology-driven structural rallies in Q2—the Growth Enterprise Market Index soared by 36.4%, electronics and communications sectors rose over 60%, and active equity-biased funds surged an average of 24.2%, far outperforming CSI 300’s 11.9%. The trend of funds concentrating in technology is driven by performance logic, but the concentration risk following heavy clustering warrants attention. Since July, electronics sector has already pulled back more than 20%.

Zhang Kun’s “Major Reshuffle”: End of Liquor Belief, Hard Tech Debuts

Zhang Kun’s portfolio shift is one of the most symbolic events in this round of public fund style change.

This fund manager, known as a “liquor believer” for over ten years, made major adjustments to the E Fund Blue Chip Select Fund in Q2. By quarter end, the fund held 968,500 shares of Kweichow Moutai, down 47.13% from Q1, and the holding’s net value ratio dropped to 5.62%, a six-year low; shares held in Luzhou Laojiao, Wuliangye, and Shanxi Fenjiu decreased by 51.76%, 70.68%, and 70.91% respectively, with their combined market value ratio to net asset at only about 10%, far below Q1’s 29%.

At the same time, this fund historically bought two tech stocks for the first time: SMIC (00981.HK) and Dongshan Precision (002384.SZ); Hong Kong stock holdings were sharply reduced from 46.07% to 25.11%; total stock positions fell from 93.12% to 75%, and concentration in the top ten holdings dropped to a historic low of 38.95%.

In the Q2 report, Zhang Kun characterized this adjustment as an active strategic transformation, not passive reduction: "The fund has started to be jointly managed by the team from Q2, adjusted its structure, increased the allocation ratios of electronics, communications, utilities, transportation, and nonferrous metals, and lowered those in food & beverage, internet, pharmaceuticals." For AI, he focused on allocating to beneficiaries of the reasoning era: optical communication, semiconductor equipment, upstream AI materials, and domestic computing power.

It is noteworthy that this reshuffle coincided with the timing in May when E Fund Blue Chip Select added managers He Yicheng and Yang Silang for joint management. Two other funds—E Fund Quality Select and E Fund Quality Enterprise Three-Year Hold—also added Peng Ke and Zhang Qi for co-management in June, and their top ten holdings’ concentration likewise dropped to historical lows, at 68.95% and 77.88%, respectively.

Liu Yanchun, another "liquor-loving" representative, showed a divided attitude towards liquor in Q2—the Invesco Great Wall Emerging Growth Fund maintained a high position in Kweichow Moutai (still holds 870,000 shares, 9.58% of net asset), but sharply reduced Shanxi Fenjiu by 2.6 million shares, and Wuliangye is no longer in the top ten holdings.

Industry: Electronics and Communications Split the Scene, Consumption Cycle Retreats

Zhang Kun’s individual choice was echoed collectively by almost all active funds at the industry level.

According to CITIC Securities, looking at changes in value of primary industry holdings, active equity-biased funds increased electronics and communications holdings sharply in Q2—electronics increased by about 631.7 billion yuan, communications by about 177 billion yuan. The combined increase exceeds the sum of all other sector increases and decreases.

At the individual stock level, the targets with largest increases are highly concentrated in communications and electronics: Zhongji Xuchuang’s portfolio market value increased by about 89.1 billion yuan to 161.8 billion yuan, maintaining its top position; New Yi Sheng increased by about 66.3 billion yuan, moving to second place; Cambricon, Dongshan Precision, GigaDevice, NAURA, Sanhuan Group, etc. all increased by over 30 billion yuan.

In sharp contrast, former core holdings such as Tencent Holdings, CATL, Kweichow Moutai, Alibaba-W, Zijin Mining, etc. were heavily reduced, with reductions of over 10 billion yuan each. The overall proportion of food & beverage holdings has plummeted from the peak of about 18%-19% during 2020-2021 to about 1.5% now, now at levels before 2016; power equipment and new energy holdings also fell from their peak of over 16% to about 5.65%.

Structurally, the overall TMT (Technology, Media, Telecom) sector holding ratio surged by 24.82 percentage points in one quarter to 62.35%; midstream manufacturing dropped from 22.41% to 14.46%, cyclical sectors from 19.44% to 11.70%, and consumer, pharmaceutical, and financial real estate allocations shrank across the board.

Sector Style: STAR Market Ratio Hits Record High, Large Caps Return to Dominance

In addition to sector rotation, structural changes at the board and market capitalization levels are also profound.

According to CITIC Securities, Q2 active equity-biased funds’ heavy positions in STAR Market stocks surged 9.75 percentage points to 26.42%, a record high; ChiNext increased 4.54 percentage points to 30.01%; combined “Double Innovation Boards” ratio exceeded 56%, while Main Board ratio was compressed further to 43.47%. This closely ties to the tech rally being focused in the innovation boards and the surge of STAR Market semiconductor listings.

In terms of market capitalization style, large cap allocations rebounded significantly—mid- and small-cap stocks below 50 billion yuan dropped 15.48 percentage points to 16.7% compared to last quarter, while proportions in each band from 200 billion to 1 trillion yuan plus all increased, with 500-1,000 billion and over 1,000 billion segments up 6.81 and 6.46 percentage points respectively. Tech leaders accelerating toward large cap concentration is a signature of this round’s clustering.

On positions, Q2 saw overall equity allocations in active funds rise somewhat: normal equity funds, equity-biased hybrids, and flexible allocation funds’ ratios were 90.21%, 88.61%, and 86.60%, all slightly up from last quarter; but Hong Kong stock allocations continued to decline, about 7.7 percentage points lower than last quarter, consistent with Zhang Kun and other top managers sharply cutting Hong Kong stock holdings.

Concentration Warning: Clustering Exceeds 2020-2021 Consumption Cycle

The degree of tech clustering has surpassed any previous theme rallies, by historical comparison.

From historical data compiled by CITIC Securities, in 2020 to early 2021, active equity-biased funds’ peak holdings in food & beverage and pharma reached about 35%; now electronics and communications together approach 60%, far higher than that period. At individual stock level, Zhongji Xuchuang tops with 161.8 billion RMB in holdings, New Yi Sheng follows with 132.9 billion RMS, together nearly matching the combined scale of Maotai, Wuliangye, etc. in their consumer prime.

The leading funds at quarter end were almost uniformly those heavily invested in semiconductor equipment, AI computing power, and optical communications—Oriental Artificial Intelligence Theme, Yinhua Integrated Circuit, Southern Information Innovation, and others with over 80% stock allocation saw single-quarter net value growths above 120%, and the highest gains so far this year exceeded 114%.

However, since July, the previously leading electronics sector has pulled back over 20%. The highly concentrated portfolio structure means once fund flows reverse, net value may drop very quickly. Looking at scale data, while overall active equity funds’ net value surged in Q2, their shares continued shrinking—some investors chose to redeem at highs, a divergence worth noting.

The CITIC Securities report also notes that the fund position disclosures are static quarter-end data, subject to short-term adjustments, and may not fully reflect actual investment activity.

Risk Warning and DisclaimerThe market carries risk, and investment requires caution. This article does not constitute personal investment advice, nor does it account for specific investment objectives, financial circumstances, or needs of individual users. Users should consider whether any opinion, view, or conclusion in this article suits their particular situation. Investments based on this are at your own risk. ```