Summary: Key Takeaways
– The top ten holdings of China’s active equity mutual funds have undergone a seismic shift, with nine spots now occupied by AI, tech, and new energy stocks, leaving Kweichow Moutai (贵州茅台) as the sole traditional consumer representative.
– Despite prolonged underperformance, several flagship funds have maintained heavy positions in liquor stocks like Kweichow Moutai for up to 36 consecutive quarters, highlighting deep-seated path dependency and strategic inertia.
– A new generation of fund managers is embracing “new consumer” themes—including collectible toys, niche hobbies, and beauty services—driving returns while their counterparts cling to fading “core assets.”
– Industry experts argue that the dichotomy between old and new consumption is false; both are products of evolving technological and demand trends, with future growth likely in services like gaming, tourism, and entertainment.
– Investors are advised to look beyond traditional consumer stalwarts and assess fund managers’ adaptability to structural shifts, as the consumer investment landscape undergoes fundamental transformation.
The composition of China’s mutual fund portfolios is telling a story of two economies. In a dramatic realignment, the latest data reveals that technology and innovation stocks have nearly monopolized the top holdings of active equity funds, with only one bastion of traditional consumption remaining: Kweichow Moutai (贵州茅台). This shift underscores a pivotal moment for investors in Chinese equities, where the once-dominant “core assets” of liquor and dairy have ceded ground to the dynamism of AI and new consumer trends. Yet, amidst this transformation, a cohort of funds demonstrates remarkable steadfastness, with some maintaining heavy positions in Kweichow Moutai for 36 consecutive quarters of heavy holdings in Kweichow Moutai. This persistence raises critical questions about strategy, performance, and the future of consumer sector investing in China’s rapidly evolving markets.
The Great Rotation: AI and Tech Eclipse Traditional Consumer Holdings
Data from Tianxiang Investment Consulting (天相投顾) paints a stark picture for the first quarter of 2025. Among the top ten holdings of China’s active equity mutual funds, only one traditional consumer stock—Kweichow Moutai (贵州茅台)—retains a place. The other nine are dominated by AI enablers like Ingenic (中际旭创) and Sunnada (新易盛), tech giants such as Tencent Holdings (腾讯控股) and Alibaba-W (阿里巴巴-W), and new energy leader Contemporary Amperex Technology Co., Limited (宁德时代). This stands in sharp contrast to the landscape just a few years prior. According to Wind data, at the end of 2021, the top ten included three liquor stocks alongside other “core assets” like China Merchants Bank (招商银行) and WuXi AppTec (药明康德). The subsequent market correction in 2022 saw traditional consumption sectors retreat, dragging down the net asset values of many billion-yuan flagship funds. While the heat has faded from these blue-chip assets, a determined group of managers continues to hold the line.
Data Reveals a Dramatic Shift in Top Positions
The numerical evidence is compelling. The ascent of technology and new energy stocks to the pinnacle of fund holdings reflects a broader market narrative where innovation-driven growth has captured investor imagination. This rotation away from traditional consumer staples signals a recalibration of risk and reward expectations in the Chinese equity space. For instance, the decline of former stalwarts like Wuliangye (五粮液), Shanxi Fenjiu (山西汾酒), and Yili Industrial Group (伊利股份) from the top ten underscores the waning appeal of these once-unshakeable holdings.
The Lone Holdout: Kweichow Moutai’s Enduring Presence
Kweichow Moutai’s (贵州茅台) solitary position in the top ten is a testament to its unique status as a cultural icon and premium brand. However, its isolation highlights the broader exodus from the once-crowded consumer darling sector, raising questions about its long-term viability as a core holding in a changing market. This scenario sets the stage for examining the funds that have doggedly maintained their positions through multiple market cycles.
Unwavering Faith: Funds Clinging to Liquor Stocks Through Market Cycles
Delving deeper into the holdings data uncovers a narrative of remarkable consistency, or perhaps stubbornness. Wind statistics show that as of the end of 2025, a total of 1,048 funds held significant positions in Kweichow Moutai (贵州茅台), with a total market value of 118.203 billion yuan, ranking it fourth among all top ten holdings. Within the active equity sphere, nearly 300 funds have it as a major holding. Notable among them are giants like E Fund Blue Chip Select (易方达蓝筹精选), Invesco Great Wall Emerging Growth (景顺长城新兴成长), E Fund Consumer Industry (易方达消费行业), and Fullgoal Tianhui Select Growth (富国天惠精选成长), each with holdings exceeding 1 billion yuan in value, collectively over 7 billion yuan. Dozens of other funds, including Peng Hua匠心精选 and HF Value Select (汇添富价值精选), hold over 100,000 shares.
Chronicling 36 Consecutive Quarters of Heavy Holdings in Kweichow Moutai
The long-term commitment is staggering. Stretching the timeline reveals funds that have not wavered in their conviction. Invesco Great Wall Emerging Growth, managed by veteran Liu Yanchun (刘彦春), has held Kweichow Moutai (贵州茅台) for 36 consecutive quarters of heavy holdings in Kweichow Moutai. Similarly, it has held Luzhou Laojiao (泸州老窖) for 37 straight quarters and China Tourism Group Duty Free (中国中免) and Mindray Bio-Medical (迈瑞医疗) for over 20 quarters. E Fund Blue Chip Select, helmed by star manager Zhang Kun (张坤), has consistently heavy positions in Kweichow Moutai, Wuliangye (五粮液), and Luzhou Laojiao for 29 quarters. This unwavering stance has come at a cost. Due to the sustained adjustment in these assets, the related funds have generally posted poor returns in recent years. Some funds have losses exceeding 30% since inception, and others have recorded negative annual returns for four consecutive years from 2022 to 2025, with a single quarter loss in Q4 2025 surpassing 1 billion yuan for some.
The Cost of Persistence: Performance Drag and Investor Frustration
The performance disconnect has not gone unnoticed by investors. A retail investor who has held one such fund for over four years told Securities Times China (券商中国) that the fund’s quarterly reports often avoid detailed analysis of its heavy holdings. Instead, they devote extensive space to broad macroeconomic discussions on GDP growth, exports, fixed investment, and monetary policy—content that seems detached from the fund’s actual portfolio and could fit any generic economic commentary. This gap between strategy communication and portfolio reality underscores a growing dissatisfaction among stakeholders and highlights the need for greater transparency and strategic clarity from fund managers entrenched in traditional sectors.
The New Vanguard: Rise of “New Consumer” and Tech Darlings
While some funds remain anchored in the past, others are riding the wave of emerging trends. Since 2024, and accelerating into 2025, so-called “new consumer” sectors—encompassing collectible toys and figurines (手办潮玩), niche hobby economies (“谷子经济”), and extending to medical aesthetics (医美) and cosmetics—have enjoyed buoyant investment sentiment. However, the funds steadfast in traditional consumption have largely remained on the sidelines, creating a stark divide in portfolio composition and performance.
From Bubble Mart to Mixue: Capturing the Zeitgeist
Take Bubble Mart (泡泡玛特), a bellwether for new consumption. By the end of 2025, 123 funds held significant positions. The top five holders by share count, all active equity funds, are not traditional consumer-focused products. For instance, Invesco Great Wall Quality Evergreen (景顺长城品质长青), managed by the newer generation manager Nong Libing (农立冰), held nearly 5 million shares of Bubble Mart, adding 233,600 shares in Q4 2025. This fund also holds positions in other new consumer assets like Lao Pu Gold (老铺黄金) and tech growth stocks like Ingenic (中际旭创). Similarly, Ruiyuan Hong Kong Stock Connect Core Value (睿远港股通核心价值), managed by the relatively inexperienced Zhang Jialu (张佳璐) with only three years in the industry, holds over 4.6 million shares of Bubble Mart as its fifth-largest holding, with substantial buying in the last quarter.
Another hot new consumer target, Mixue Group (蜜雪集团), is also gaining fund embrace. China Europe Internet Pioneer (中欧互联网先锋), managed by Wang Ying (王颖) whose research background is in media and internet, holds nearly 500,000 shares of Mixue, the most among funds. Other products like Jiao Yin Quality Growth One-Year Hold (交银品质增长一年持有) and Harvest Industry Pioneer (嘉实产业先锋) also hold significant stakes. The managers of these funds have little prior involvement with traditional consumer stocks, signaling a clear generational and thematic shift in investment focus away from the old guard represented by the 36 consecutive quarters of heavy holdings in Kweichow Moutai.
Generational Shift in Fund Management and Investment Themes
“The chasm in public fund holdings between old and new consumption seems to exist, but in reality, it does not,” a equity fund manager in South China told Securities Times China. “Some peers continue to suffer losses by heavily investing in consumer liquor stocks, which I find hard to comprehend.” This manager emphasized that old and new consumption are not mutually exclusive. Even consumption and AI technology are both products of the evolution of technological and market demand trends. A public fund research professional in Beijing pointed to deep path dependency, where managers are unwilling to change. Funds heavily invested in traditional consumption often have singular strategies and oversized assets, making portfolio adjustments costly. More critically, these managers have formed a comfort zone within traditional consumption, which is not easy to break out of, as evidenced by the relentless commitment to holdings like Kweichow Moutai over 36 consecutive quarters.
Bridging the Divide: Fund Manager Insights on Consumer Evolution
The divergence in consumption investment strategies stems from fund managers’ differing forecasts for the sector’s future. As a component of the economy, consumption will remain a vital driver of growth. However, compared to physical goods consumption, service consumption in entertainment, gaming, and others is held in higher regard for future investment opportunities, challenging the relevance of past strategies centered on traditional staples.
Comfort Zones and Path Dependence: The Psychological Hurdle
“Consumption is a vast market, and structural changes will bring growth opportunities to aggressive companies,” said Yongying Fund manager Jiang Weihua (蒋卫华) to Securities Times China. He believes a company’s competitive edge comes from its strategy and management’s adaptation to environmental changes. Smaller organizations with higher flexibility and management efficiency are more likely to seize strategic opportunities and achieve超额 growth. He tends to挖掘 enterprises growing from small to medium-sized, rather than blindly chasing “great companies”—a mindset that contrasts sharply with funds locked into large-cap consumer giants through inertia.
Redefining “Long Slope, Thick Snow”: Future Consumer Opportunities
Chen Jinwei (陈金伟), a fund manager at Peng Hua Fund (鹏华基金), views prior market pessimism towards consumption as somewhat irrational. For instance, positive news in tech is often interpreted as negative for consumption, while improved micro-consumption data is argued to be unsustainable. He believes future opportunities in consumption still exist, but this does not equate to the muscle memory of last cycle’s consumer star stocks. Chen explained that some previous star consumer stocks were essentially driven by investment within the “macro troika” (investment, consumption, exports), where investment generated a “trickle-down effect” to spur consumption, hence the adage “liquor is an early-cycle indicator, mass-market goods are late-cycle.” With declining investment returns and changes in investment categories and entities, he is not optimistic about the last cycle’s star consumer stocks represented by liquor and some high-end consumption, which were driven by traditional investment. Instead, he看好 consumption directly driven by income redistribution, favoring mass-market goods consumption, with gaming, tourism, sports, and film becoming the new “long slope, thick snow” – a metaphor for sustained, compounding growth opportunities that may outperform the legacy bets on stocks like Kweichow Moutai.
Furthermore, consumption opportunities can align with tech manufacturing. Deng Xinyi (邓心怡), manager of Noah Advantage Industry (诺安优势行业), noted that in the current robotics industry development, humanoid and service robots are core growth engines. The application of robots in real production and life scenarios is deepening, with continuous orders落地 in automotive manufacturing, consumption, cultural tourism, elderly care, and other fields. She focuses on robot manufacturers and产业链 with data and卡位 advantages in practical scenarios, illustrating how the convergence of consumption and technology can create new investment frontiers beyond traditional sectors.
Strategic Imperatives: Navigating the Consumer Sector Crossroads
The tale of 36 consecutive quarters of heavy holdings in Kweichow Moutai serves as a potent case study in investment strategy, behavioral finance, and market evolution. For institutional investors and fund managers globally, the Chinese consumer sector presents both cautionary tales and emerging avenues, demanding a nuanced approach to portfolio construction and risk management.
Lessons from the 36-Quarter Hold on Kweichow Moutai
The prolonged commitment to Kweichow Moutai highlights the risks of strategic inertia and the potential pitfalls of over-reliance on historical outperformance. While brand strength and pricing power are real, they must be continually reassessed against structural shifts in consumer behavior, demographic trends, and competitive innovation. Funds that fail to adapt their thesis risk alienating investors and underperforming benchmarks, as seen in the performance drag associated with the 36 consecutive quarters of heavy holdings in Kweichow Moutai. This underscores the importance of dynamic strategy reviews and willingness to pivot when market fundamentals change.
Actionable Insights for Institutional Investors
– Conduct Rigorous Fund Due Diligence: Look beyond past glory and assess a fund manager’s adaptability, thematic awareness, and willingness to evolve. Scrutinize quarterly reports for genuine portfolio analysis versus generic macroeconomic commentary, especially for funds with long-standing positions in traditional consumer stocks.
– Embrace a Nuanced View of Consumption: Recognize that the consumer universe is bifurcating. Allocate across traditional staples with proven resilience, disruptive new consumer models, and the intersection of consumption with technology (e.g., robotics in services). Avoid binary thinking that pits “old” against “new” consumption.
– Monitor Generational Change in Management: Newer, niche-focused fund managers often demonstrate greater agility in capturing emerging trends. Consider allocating a portion of assets to strategies managed by teams with diverse backgrounds in tech, internet, and new retail, as they may be better positioned to identify growth in sectors like gaming or collectibles.
– Focus on Structural Drivers: Future consumer growth in China may be less about broad macroeconomic cycles and more about specific themes like income redistribution, service consumption, and technology integration. Position portfolios to benefit from these secular shifts, rather than relying on cyclical rebounds in traditional sectors.
The consumer investment thesis in China is undergoing a fundamental rewrite. The dominance of traditional “core assets” has been challenged, while innovation and new consumption models are ascendant. Funds that mechanically cling to past winners, exemplified by the 36-quarter hold on Kweichow Moutai, face diminishing returns and relevance. Conversely, managers embracing thematic shifts towards services, entertainment, and tech-integrated consumption are positioning for future growth.
For global investors, the imperative is clear: move beyond simplistic categorizations of “old” versus “new” consumption. Engage in deep, bottom-up research to identify companies and funds that understand the nuanced drivers of modern Chinese demand. Diversify exposures to capture both the defensive qualities of established brands and the explosive potential of emerging trends. The greatest opportunity may lie not in choosing sides, but in strategically bridging the divide to build resilient, forward-looking portfolios in the world’s most dynamic consumer market. As the market continues to evolve, staying informed through reliable data sources like Wind and Tianxiang Investment Consulting, and heeding insights from adaptive fund managers, will be key to navigating the complexities of Chinese equity investments successfully.