Public offering scale surpasses 38 trillion yuan for the first time, with stable funds serving as a ballast for expansion

Why Did the Scale of Money Market Funds Increase Despite a Decrease in Yield?

[Global Network Finance Comprehensive Report] On March 25, the latest public fund market data released by the Asset Management Association of China (AMAC) attracted widespread attention. By the end of February, the total scale of public funds in China reached 38.61 trillion yuan, breaking the 38 trillion yuan mark for the first time in history, and has set a historical high for 11 consecutive months. Against the backdrop of the current macroeconomic environment and increased volatility in the capital market, the sustained rise in public fund scale demonstrates the strong vitality of residents’ wealth management demand. By type, the performance of various funds in February showed significant differentiation: the scale of money market funds increased by 579.11 billion yuan, contributing the largest scale increment; bond funds increased by 216.734 billion yuan that month, mixed funds grew by 93.341 billion yuan, and FOF (fund of funds) and QDII (Qualified Domestic Institutional Investor) also achieved slight scale growth; in contrast, equity funds saw a decline of 79.035 billion yuan. Some fund managers pointed out that the growth in fund scale is mainly attributed to the continuation of the “deposit migration” trend. In a low-interest-rate environment, the attractiveness of traditional savings has weakened, and residents’ wealth allocation is undergoing a systematic reshaping from “depositing in banks” to “investing in funds.”

Money Market and Bond Funds as Growth Pillars, Risk-Aversion Attributes Favored

In February, the more stable money market funds and bond funds became the absolute driving force behind the record high in public fund scale. Specific data shows that by the end of February, the scale of money market funds reached 15.85 trillion yuan, surging by 579.11 billion yuan from the end of January, with a growth rate of 3.80%. Although money market fund yields have continued to hover at the bottom against the backdrop of an “asset shortage,” their scarce value as cash management tools has become increasingly prominent. As of March 25, among the more than 300 money market funds included in the statistics, the average annualized yield over the past seven days was approximately 1.14%, with the prominent Tianhong Yu’ebao’s yield over the past seven days being only 1.001%, just a step away from falling below the “1%” mark.

Regarding the phenomenon of declining yields but sharply increasing scale of money market funds, Guanzhiyu, a fund manager at China Europe Fund, analyzed that money market funds mainly invest in deposits, interbank certificates of deposit, short-term bonds, and other assets. Recently, the central policy interest rate has decreased, and bank deposit rates have been cut several times, leading to a decline in short-term asset yields. To maintain the positive yield baseline of the products, several money market funds have recently actively lowered their management fee rates, with the maximum reduction from 0.90% to 0.25%, to maintain the competitiveness of their products. Zhu Yanqiong, a fund manager at Taiping Fund’s fixed income investment department, believes that in an environment of increased volatility in equity and bond markets, funds urgently need a “safe haven.” Money market funds, with their high liquidity and stable yields, have absorbed a large amount of risk-averse capital. Additionally, bond funds saw an increase of 216.734 billion yuan in February, reaching 10.75 trillion yuan, with a growth rate of 2.06%. Market analysis suggests that after the A-share market reached a short-term high in February, it continued to fluctuate, prompting some funds to choose to cash in or turn to defensive positions, highlighting the increasing demand for risk aversion against the backdrop of market uncertainty.

FOF Funds See a Significant Month-on-Month Increase, Bank Channels Boost “Fixed Income +” Trend

Apart from traditional stable varieties, FOF funds also performed impressively in February, contributing a scale increment of 34.536 billion yuan in a single month. Investors’ enthusiasm for FOF products is mainly reflected in the “hit products” phenomenon in the new issuance market. As of March 25, the total amount raised by FOFs in the issuance sector this year has exceeded 65 billion yuan, with several products such as Bosera Yingtai Zhenxuan and China Europe Yingxin Steady Growth each exceeding 5 billion yuan in established scale. Nord Fund analysis pointed out that the hot issuance of FOFs stems from the high compatibility of customer structure, with bank retail channels becoming a key force in this round of expansion.

In recent years, banks have accelerated their layout, collaborating with fund companies to launch exclusive FOF plans, shifting from single distribution to customized operations. A retail line representative from a joint-stock bank revealed that more than 50 trillion yuan of time deposits will mature this year. FOFs with a three-month holding period, leveraging the “fixed income +” diversified allocation model, have become a core recommendation target for bank wealth managers, providing higher returns than deposits while considering liquidity. According to statistics from Lide Fund, the current supply of FOF products presents a clear “low-risk dominant” pattern, accurately aligning with investors’ preferences for stable yields and drawdown control in a low-interest-rate environment, further establishing their core positioning as a substitute for deposits and a tool for wealth management.

Equity Fund Scale Declines Slightly, Capital Game Trends Toward Defense

In stark contrast to the hot performance of stable funds, the scale of equity funds experienced a certain degree of decline in February, decreasing by approximately 79 billion yuan. Industry analysts pointed out that this is mainly attributed to the shrinkage of ETF fund shares. Statistics show that the scale of the ETF market continued to decline in February, decreasing by 74.1 billion yuan in a single month, with net outflows from both the CSI 300 ETF and the CSI 500 ETF exceeding 20 billion yuan each. CITIC Securities analysis suggests that recent global geopolitical risks combined with domestic inflation rebound have led to a cooling of trading enthusiasm for major indices, while the structural trading crowding has increased, with funds more inclined to engage in short-term games between price increase chains, undervalued assets, and defensive assets.

Regarding the future market direction, fund managers generally express a cautiously optimistic attitude. Cui Shutian, director of the equity research department at Everbright Pramerica Fund, stated that the A-share market over the past two years has mainly been a valuation repair market, with historical occurrences of three consecutive years being rare. The valuation expansion space in 2026 is limited, and corporate earnings will become the core variable determining market direction. Caitong Fund also pointed out that the current core trading logic in the market lies in the sustained impact of high oil prices on inflation and economic fundamentals. In this context, sectors with clear industrial trends and prosperity will be more resilient, and the AI sector may still be a key allocation direction. Overall, the breakthrough of public fund scale exceeding 38 trillion yuan reflects a profound change in residents’ wealth allocation logic, and as the market environment evolves, the trend of funds leaning toward stable assets may continue in the short term. (Wen Xin)