Mutual Funds' Q2 Electronics & Telecom Holdings Near 60%, STAR Market Allocation Hits All-Time High
0xBroomberg
China's actively managed equity funds pushed nearly 60% of holdings into electronics and telecom in Q2, while STAR Market allocation hit a record 26.42% — far exceeding the 2020 baijiu crowding peak — but the electronics sector has already pulled back over 20% since July.
What does 60% in two sectors look like historically?
Electronics holdings rose to roughly 43%, telecom to about 17% — together nearly 60%, the highest since 2015.
For comparison, the previous crowding peak — food & beverage plus pharma in 2020–2021 — topped out at about 35%. This means → today's tech crowding is nearly double that record.
In plain terms = fund managers have put six out of every ten yuan into the same trade. No prior cycle comes close.
Who got bought the most, and who got dumped?
Innolight (中际旭创) saw holdings rise by roughly RMB 89.1 billion to RMB 161.8 billion, keeping its No. 1 heavy-weight slot. Eoptolink (新易盛) added about RMB 66.3 billion to take second place.
Cambricon, Dongshan Precision, GigaDevice, NAURA, and Sanan Optoelectronics each gained over RMB 30 billion — all tech hardware names.
The flip side: food & beverage allocation plunged from a 18%–19% peak in 2020–2021 to roughly 1.5% now, back to pre-2016 levels.
What does Zhang Kun's portfolio overhaul signal?
Zhang Kun — known for over a decade as China's most famous baijiu-bull fund manager — dramatically restructured E Fund Blue Chip Select in Q2: Kweichow Moutai holdings cut by 47.13%; Luzhou Laojiao, Wuliangye, and Shanxi Fenjiu cut by 51.76%, 70.68%, and 70.91% respectively.
The fund bought SMIC (中芯国际) and Dongshan Precision for the first time ever, slashed its Hong Kong stock allocation from 46.07% to 25.11%, and pushed top-ten concentration to a record low of 38.95%.
This reflects something bigger than one manager's call: when the most committed consumer-sector fund manager pivots to tech, the entire industry is redefining where "certainty" lives.
How did the sector map shift?
TMT holdings jumped 24.82 percentage points in a single quarter to 62.35%. Mid-stream manufacturing fell from 22.41% to 14.46%; cyclicals dropped from 19.44% to 11.70%.
STAR Market plus ChiNext now account for over 56% of holdings; the main board shrank to 43.47%. This means → more than half the money moved to boards with higher listing bars and stronger tech profiles.
Size style flipped too: sub-RMB 50 billion mid-and-small caps plunged 15.48 percentage points to 16.7%, while every bracket above RMB 200 billion expanded — capital is concentrating in tech mega-caps.
Is the crowding risk already showing up?
Active equity funds saw NAV surge in Q2, yet total shares outstanding kept shrinking — some investors redeemed at the highs. The divergence between rising NAV and falling shares is already visible.
Since July, the electronics sector has pulled back more than 20%. In plain terms = when 60% of holdings sit in one trade, any reversal in capital flows can amplify drawdowns just as fast.
CITIC Securities' research note cautions: quarterly-report holdings reflect a single end-of-period snapshot and may not fully capture real-time portfolio moves.
Content is for reference only, not financial advice.