Publicly offered active equity continues to rebound, with 22 funds earning 30% in a single month; innovative drugs are a money printing machine

The return of actively managed equity funds has been so rapid and unexpected!

According to statistics from Zhitang as of July 31, 2025, some actively managed equity funds have seen their net values soar like a "crazy roller coaster" in the past month, with 22 funds increasing by more than 30%.

In particular, funds primarily invested in pharmaceuticals have seen a surge of double-digit returns. Hui Tian Fu Hong Kong Advantage Select (QDII) has seen its year-to-date return rise from 86.5% at the end of June to 138% at the end of July (as of the value published on July 31, the same below). Among domestic funds, Great Wall Pharmaceutical Industry, Yongying Pharmaceutical Innovation Select, and Fortune Pharmaceutical Innovation have all exceeded a 90% increase year-to-date.

With the refreshing of market styles this year, emerging healthcare and consumer industry stocks have re-emerged, and fund managers skilled in active investment are experiencing a strong return of investment style and yields. They, along with top index funds, are beginning to accumulate new wealth effects.

This is an important trend that fund investors or ordinary stockholders cannot ignore.

Doubling Funds Frequently Appear in the Past Month

According to statistics from third-party Wind data, as of the end of July this year, there have been 6 actively managed equity funds in the industry with year-to-date returns exceeding 100%. Just a month ago, there were no doubling funds in the industry.

This is enough to illustrate how strong the reversal of market styles has been.

According to the statistics, the funds with year-to-date returns exceeding 100% include Hui Tian Fu Hong Kong Advantage Select, Great Wall Pharmaceutical Industry Select, Bank of China Hong Kong Stock Connect Pharmaceutical, Yongying Pharmaceutical Innovation Select,Hua An Pharmaceutical BiotechnologyandNuo An Select Value** (see the chart below).

In addition to the leading funds mentioned above, the funds with high returns in the past month (as of August 1) also include Yongying Pharmaceutical Health, Yongying Technology, Huafu Health and Entertainment, Caitong Integrated Circuit, Caitong Craftsmanship, Yi Fang Da Rui Xiang, Yi Fang Da Global Pharmaceutical, Guangfa Pharmaceutical Innovation, and Guangfa Shanghai-Hong Kong-Shenzhen Pharmaceutical.

From the quarterly reports of the past two quarters, most of these funds are directed towards innovative drugs, especially in the Hong Kong stock innovative drug sector, with a few in the AI field.

Looking back a little over a year ago, "Hong Kong stocks + pharmaceuticals" was almost the worst-performing style asset in recent years. In just one year, this type of asset has "turned the tables" to become the hottest asset in the market.

The "sea change" in the A-share and Hong Kong stock markets is evident.

Are Leading Funds Still Heavily Invested in Pharmaceuticals?

So when will these leading funds "pull back" from the innovative drug sector?

The answer is that there are currently no signs of "retreat."

From the net value trends of Hui Tian Fu Hong Kong Advantage Select, managed by Zhang Wei, this fund has mostly been leading the market in July. As of July 30, the net value increase since the second half of the year is about 27.75%, still showing signs of "running fully loaded." In addition, if we calculate based on the top ten heavy positions and allocations disclosed by Huatai-PineBridge Hong Kong Advantage at the end of June, this combination saw an increase of over 25.3% in July, with a very high explanatory power for the net value.

In other words, if fund manager Zhang Wei maintains the innovative drug stock portfolio from the end of June, he is likely to achieve a good net value performance. If he significantly sells off to switch to other sectors with lower growth, it will be difficult to achieve the current net value.

Specifically regarding heavy positions, the two major stocks held by Huatai-PineBridge Hong Kong Advantage, AKESO and InnoCare Pharma-B, saw increases of over 50% in July, while KEYMED BIO-B, 3SBIO, and INNOCARE increased by over 30%, maintaining a strong trend (see chart below).

From "Third Place" to "Second Place"

Additionally, the Great Wall Pharmaceutical Industry Select Fund managed by Liang Furui accelerated again in July 2025, now ranking among the "top two" in the industry.

As a number of pharmaceutical funds have surpassed the net value of the Beijing Stock Exchange thematic funds, Liang Furui has progressed from "third place" to currently being "second" (the runner-up).

As of July 31, this fund has increased by over 127% since the beginning of the year; among them, the increase in the second half of the year once exceeded 30%, later adjusting to over 29.6%.

Liang Furui's "investment fortune" is exceptionally good. His Great Wall Pharmaceutical Industry Fund was established in October 2024, essentially avoiding the nearly four-year "bear market" in pharmaceutical stocks. This fund only fluctuated for less than three months before "bottoming out" and has been rising ever since. This has made both the Great Wall Pharmaceutical Industry and Liang Furui's performance since his career very outstanding.

At the same time, since the second quarter of this year, Liang Furui has demonstrated considerable stock-picking ability in pharmaceuticals. From the investment portfolio (see chart below), in the past few months, Liang Furui has been increasing the investment proportion in Hong Kong pharmaceutical stocks, which currently occupies nearly the upper limit allowed by the contract.

Research Expertise "Empowers" Active Investment

Observing the resumes of these leading fund managers, it is evident that a background in medical or pharmaceutical research has made a significant contribution to their performance. This is true for Zhang Wei and Liang Furui, and the following few fund managers are mostly also from a pharmaceutical research background.

Zheng Ning of the Bank of China Hong Kong Stock Connect Pharmaceutical Fund previously served as a stock research manager and senior stock research manager at Taikang Asset Management Company; he held positions as a senior researcher and head of the pharmaceutical group at Zhonggeng Fund before joining Bank of China Fund.

Dan Lin of Yongying Pharmaceutical Innovation Select Fund previously worked as a pharmaceutical researcher at Dongfang Securities Co., Ltd.; he was a pharmaceutical researcher at Changjiang Securities Co., Ltd. and joined Yongying Fund Management Co., Ltd. in 2023 Although not prominently featured on his resume, Tang Chen of Nuoan Select Value Fund has been a member of the company's pharmaceutical research team since joining Nuoan Fund in 2015. He is currently a fund manager in the investment team with a primary focus on pharmaceutical funds and is a specialist in pharmaceutical research.

This also verifies from one aspect that active investment is experiencing an unexpected "return." When asset categories with high research thresholds enter the market's popular stock circles, the active research capabilities of fund managers and their supporting research teams become key factors. This is because the latter not only drives forward-looking judgments about the industry but also determines whether they can achieve a "spring river water warms the duck knows first" layout in individual stocks.

How Long Can the Enthusiasm for Pharmaceuticals Last?

Although there are still some cautious sentiments in the market, the recovery of pharmaceuticals seems to be heading towards a broader blue ocean.

On one hand, based on the resilient core investment logic and performance elasticity of innovative drugs, more and more viewpoints believe that the performance of this sector is likely to continue.

Zheng Ning firmly believes that the stock price performance of innovative drugs in this round is driven by molecular-level profitability (i.e., fundamental recovery as the main momentum). In the coming years, we may see a profit explosion in the innovative drug sector, so the sustainability of this round of market is expected to be relatively strong.

On the other hand, starting from the core concept of innovative drugs, many viewpoints believe that the recovery of innovative drugs is expected to spread to various fields, including healthcare.

The China Europe Medical Innovation Fund, which has doubled its net value over the past year, believes in its quarterly report that domestic companies in the innovative drug field, especially in ADC, dual antibodies, and peptides, are gradually gaining global recognition for their competitiveness, with multiple varieties still having overseas authorization expectations. Structural opportunities in the consumer healthcare sector are expected to continue. The demand for home medical devices will steadily grow under the trend of an aging population. The recovery trend in the medical device sector is expected to continue.

Zhang Wei believes that innovative drugs will be the most important main line in the pharmaceutical industry in the coming years. As the regulation of the pharmaceutical industry enters normalization, domestic medical demand and medical behaviors are gradually recovering, and product-oriented companies will usher in restorative growth by 2025. At the same time, various policies supporting the development of the innovative drug industry will continue to be implemented, with significant improvements expected in payment, access, and investment financing. The pharmaceutical industry will continue to show good anti-cyclical and technological attributes in the next 2-3 years.

The breakthroughs in the pharmaceutical industry may be creating the "first sound" of performance recovery for actively managed equity funds, which is also a trend that cannot be ignored