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As stock private funds overall reduce their positioning, hundred-billion-yuan private equity funds are moving in the opposite direction. According to Simuwang data as of May 15, the stock private fund positioning index stood at 80.09%, down 0.44% week-over-week and marking four consecutive weeks of decline. However, the hundred-billion-yuan fund segment reversed course, with its positioning index rising to 82.10%, up 1.38% week-over-week and ending a four-week downtrend. This divergence reflects differing risk appetites and investment horizons among funds of different scales, with larger funds pursuing longer-term accumulation strategies despite broader market caution.
Positioning Data by Fund Size
Smaller private equity funds continued to reduce positions across most size categories. Simuwang data showed positioning indices for the week of May 15 as follows:
- 50–100 billion yuan: 87.07% (down from prior week)
- 20–50 billion yuan: 76.34% (down from prior week)
- 10–20 billion yuan: 80.48% (down from prior week)
- 5–10 billion yuan: 81.53% (down from prior week)
- 0–5 billion yuan: 79.41% (down from prior week)
The positioning index declined only 2.07% from its monthly high, indicating that while funds are reducing exposure, the pace of retreat remains measured.
Hundred-Billion Funds Counter-Trend Positioning
In contrast to the broader retreat, hundred-billion-yuan funds significantly increased their fully-invested positions. Simuwang data as of May 15 showed:
- Fully-invested (>80%) hundred-billion funds: 62.17% of the segment, up approximately 5% from the prior week
- Low-position hundred-billion funds: 12.87%, up slightly from prior week
- Medium-position hundred-billion funds: 24.33%, down from prior week
- Zero-position hundred-billion funds: 0.63%, down from prior week
The sharp increase in fully-invested funds signals aggressive positioning by the largest players in the market.
Reasons for Billion-Fund Accumulation
Li Chunyu, fund manager at Rongzhi Investment FOF (part of Simuwang Group), identified three primary reasons for the hundred-billion-yuan funds' counter-trend positioning increase:
Fund Attributes and Strategy: Large-scale funds face high rebalancing costs and cannot execute short-term trades efficiently. This structural constraint forces them to adopt left-side positioning strategies, entering the market during periods of weak sentiment to capture longer-term value.
Rational Judgment on Fundamentals and Valuation: Hundred-billion-yuan funds maintain positive views on technology and high-end manufacturing sectors, citing long-term industry growth prospects and earnings certainty. Market pullbacks, in their view, enhance the long-term allocation value of quality assets.
Optimistic Macro and Industry Trends: These funds express confidence in economic recovery, improving liquidity conditions, and high-growth sectors such as artificial intelligence. They view current market adjustments as positioning opportunities rather than warning signals. Their focus on long-term absolute returns allows them to maintain investment discipline despite short-term volatility.
Market Outlook and Investment Strategy
Qinchen Assets outlined the current market structure as a dual-track system centered on technology and energy. The firm noted that most high-growth assets are deeply tied to AI industry development, which creates capital competition between AI and traditional sectors. This dynamic raises overall operating costs and pressures traditional industry margins, forcing many real-economy sectors to undergo transformation. Simultaneously, AI technology is penetrating process-oriented fields such as programming, making economy-wide automation and intelligence trends inevitable.
Ningshui Capital expects the A-share market to continue oscillating with a bias toward strength and structural differentiation. The firm anticipates a gradual shift from "extreme growth" toward "balanced growth and value," with markets facing dual internal and external pressures. While indices may retain upward momentum, the phase of broad-based technology stock gains may have passed. The firm recommends avoiding pure thematic plays, highly valued names, and weak-earnings stocks while capturing structural certainty opportunities amid market divergence.
Juming Investment advised continued focus on high-growth AI sectors while carefully assessing localized bubble risks from AI capital expenditure—particularly excess profits in upstream storage components that create cost pressures on downstream consumer electronics and industrial sectors. The firm also recommends selectively positioning in segments benefiting from elevated oil prices and petroleum shortages, as well as quality manufacturing subsectors such as shipbuilding and lithium batteries showing upward momentum.
Qinchen Assets (in additional guidance) recommended concentrating on optical communications and storage as clear inflation-benefiting segments, plus the power sector as a hard constraint on development. The firm emphasized tracking the global semiconductor equipment upcycle recovery and monitoring the earnings realization phase of China's domestic computing infrastructure industry chain for certainty-driven opportunities.
