The first half of 2025 proved to be a resilient period for global markets, with the A-share indices, Hang Seng Index, and Hang Seng Tech Index all closing higher despite external volatility. This positive momentum translated into strong performance across the fund landscape. According to iFinD data from Tonghuashun, over 6,800 actively managed equity funds delivered positive returns in the first six months—more than 80% of all funds with complete performance records.
One defining feature of the 2025 market was the rapid rotation among high-growth sectors, creating intense competition among actively managed funds betting on different themes. By mid-year, three sectors had clearly outperformed: innovation-driven pharmaceuticals, Beijing Stock Exchange (BSE)-focused funds, and new consumption trends. These themes dominated the top 20 performers in the actively managed equity fund rankings.
Innovation Pharma Shines: 14 of Top 20 Funds Linked to Biotech Breakthroughs
Funds heavily invested in innovative drug development emerged as the biggest winners. The Tongfu Hong Kong Advantage Select Mixed (QDII) A claimed the top spot with an impressive 85.64% return, driven entirely by its concentrated exposure to Hong Kong-listed biotech firms.
Remarkably, 14 of the top 20 funds were deeply exposed to innovation pharma. The CITIC Construction Investment BSE Select Two-Year Close-Ended Mixed A followed closely with an 82.45% return, securing second place. Meanwhile,华夏 (Huaxia), 万家 (Wanjia), 广发 (Guangfa), 申万菱信 (Shenwan Lixin), and 恒越 (Hengyue) funds also made the elite list through strategic positioning in BSE and new consumer plays.
👉 Discover how global capital is reshaping biotech investment strategies in 2025.
From Steady Climb to Full Breakout: The Rise of Innovation Pharma & BSE
While early 2025 saw funds focused on humanoid robots and advanced manufacturing leading the pack, a shift occurred by Q2. By March, several BSE- and innovation pharma–themed funds were already entering the top 20.
For example, CITIC Construction Investment’s BSE fund returned 38.98% in Q1 alone, ranking seventh. Similarly, Northeast Select Value Mixed, managed by Tang Chen, achieved a 31.91% return in Q1 and nearly doubled that by June, finishing at 61.88%—good enough for 10th place overall.
April marked the turning point. As investor enthusiasm for tech cooled, innovation pharma gained momentum due to a powerful combination of policy support, rising venture capital inflows, and strong pipeline progress in drug development. Hong Kong’s market advantage—home to many late-stage biotech firms nearing commercialization—further amplified gains.
The Tongfu Hong Kong Advantage fund exemplifies this success. Its top ten holdings are all Hong Kong-listed innovation pharma stocks:
-荣昌生物 (688331.SH)
-科伦博泰生物-B (06990.HK)
-信达生物 (01801.HK)
-和黄医药 (00013.HK)
-康诺亚-B (02162.HK)
-翰森制药 (03692.HK)
-康方生物 (09926.HK)
-诺诚健华 (09969.HK)
-来凯医药-B (02105.HK)
-百济神州 (06160.HK)
Tang Chen, manager of Northeast Select Value Mixed, noted that valuation gaps between A-share and Hong Kong innovation pharma assets are narrowing. “With global pricing models, low capital barriers in private markets, and improving Hong Kong liquidity,” he said, “the risk-return profiles of both markets are converging.”
BSE Outlook: Institutional Interest Grows Amid New Index Launch
Looking ahead, analysts remain bullish on the Beijing Stock Exchange. On June 30, the official launch of the Beijing Specialized & Innovative SME Index signaled growing institutional recognition. Coupled with steady IPO approvals and increasing M&A activity, trading volume and investor attention are expected to remain elevated.
Notably, institutional ownership of BSE-listed stocks surged in Q1 2025. Analysts at Galaxy Securities estimate this could translate into tens of billions in new fund inflows over the coming quarters—particularly benefiting high-liquidity “specialized and innovative” small-cap firms.
New Consumption: Picking Winners Was Key
Performance in the new consumption space came down to one factor: identifying breakout stocks early.
Top-performing funds like GF Growth Leading One-Year Holding, Shenwan Lixin Lerong One-Year Holding, and Hengyue Artisan Preferred One-Year Holding all shared a common strategy—significant exposure to Pop Mart (09992.HK) and Old Bakery Gold (06181.HK).
By mid-year, Pop Mart had surged 198.6%, while Old Bakery Gold rocketed up 321.53%. These gains were fueled by a rare alignment of factors:
- Market timing: Traditional consumer stocks underperformed, pushing capital toward fresh opportunities.
- Valuation appeal: New consumption firms offered growth at reasonable valuations.
- Investor sentiment: Early profits attracted retail and institutional follow-through, reinforcing the trend.
However, signs of fatigue emerged by mid-year. In May, early investor Fengqiao Capital exited its entire pre-IPO stake in Pop Mart. By June, a broad correction hit Hong Kong’s new consumption sector, dragging down related A-share IP concept stocks.
Notable declines included:
- Bruderke (00325.HK): Down 7.89% in June
- Mixue Group (02097.HK): Negative monthly return
- Petcare leader Zhongchong Shares (002891.SZ): Also declined
Tianhong Fund warned that while momentum helped drive valuations higher, current levels are no longer cheap. They advise investors to focus on companies with trackable earnings and verified high-frequency data, rather than pure concept plays.
👉 Explore how real-time data is transforming consumer stock analysis today.
Tech Sector Rebounds in June — Is a Full Comeback Coming?
At the start of 2025, excitement around DeepSeek’s AI breakthrough sparked a rally in tech-themed funds. However, after March, the sector entered a sharp correction. Funds slow to rotate out of AI and hardware themes suffered steep losses.
By June 30, Qianhai Kaiyuan Artificial Intelligence Theme Mixed A ranked last among active equity funds with a -24.69% return—the only fund below -20%. Its portfolio remained heavily weighted in semiconductor and communication hardware names like:
-芯原股份
-瑞芯微
-恒玄科技
-中科蓝讯
Similarly, fund manager Jin Zicai—who posted over 30% returns in 2024—saw all six of his funds finish in the bottom ten. Eddy Liu of Pioneer Fund also struggled, with his two products ranking near the bottom.
Yet June brought a dramatic reversal.
Data shows tech funds led the monthly rebound:
- Everbright Youngtech Smart Selection Mixed A: +37.21%
- Aviation Opportunity Leading Mixed A: +34.15%
- DB Powerstar Value Flexible Allocation A: +31.87%
- CITIC Future Performance Driver Mixed A: +30.52%
All four were heavily invested in electronics, machinery, and telecom equipment.
Why Tech May Shine in H2 2025
According to CITIC Securities’ 2025 mid-year outlook, AI is transitioning from experimental tech to real-world productivity tools. Improvements are already visible in advertising, gaming, enterprise software, and smart vehicles—reshaping product offerings and competitive landscapes.
With expected launches of DeepSeek R2 and GPT-5 later this year, CITIC believes the fundamental re-rating of China’s tech sector remains incomplete.
Frequently Asked Questions
Q: What drove innovation pharma funds to top performance in 2025?
A: A combination of supportive government policies, increased global capital flow into late-stage biotech firms, and strong clinical trial results created ideal conditions for innovation pharma funds—especially those focused on Hong Kong listings.
Q: Are BSE-focused funds still a good investment?
A: Yes. With the launch of the BSE Specialized & Innovative Index and rising institutional ownership, liquidity and visibility for quality small-caps are improving—making BSE funds attractive for long-term investors.
Q: Why did tech funds perform so poorly in early 2025?
A: Many tech funds were overconcentrated in pre-commercial AI hardware and semiconductor plays. When market sentiment shifted post-March, these positions corrected sharply due to high valuations and limited near-term earnings visibility.
Q: Can tech funds recover in the second half?
A: Early signs are positive. June’s strong rebound suggests renewed investor confidence as AI moves toward practical applications. If major models like GPT-5 deliver tangible use cases, tech could regain leadership.
Q: Is the new consumption rally over?
A: While momentum has slowed, fundamentally strong players with proven business models may still offer value. Investors should shift focus from speculative themes to companies with transparent earnings and customer engagement metrics.
Q: How can investors avoid getting caught in fading trends?
A: Focus on funds with adaptive strategies and transparent portfolio logic. Diversify across proven growth sectors like innovation pharma and emerging tech—but maintain discipline around valuation and liquidity signals.
👉 Stay ahead of market shifts with insights into next-gen investment themes for 2025.