"Profits and Losses From the Same Source" Drama Unfolds! Fund Managers: Tech Investment Enters "Darwin Moment"

The first quarter of 2026 is coming to an end, and the “profit and loss are from the same source” drama in fund investments is playing out again. Some high-performing funds from last year’s “tech bull” have experienced net value declines due to market shifts. Several products heavily invested in the robotics sector have faced double-digit withdrawals this year.

Against the backdrop of some concentrated funds beginning to loosen and switch between high and low positions, the risks of betting on single-sector strategies are fully exposed. While technology stocks remain the main theme, some fund managers point out that as we enter the “Darwin moment,” market perception of tech stocks needs to shift from “concept narratives” to “commercialization realization” and “technological implementation certainty.”

Many high-performing funds from last year have “changed faces” this year

As the first quarter of 2026 draws to a close, performance gaps have already emerged among some actively managed equity products, and the sustainability of last year’s top performers remains a market focus.

However, the reality is different from expectations. Many funds that underperformed this year are actually the same products that shined last year. For example, a fund under a medium-sized public fund in North China heavily invested in the “humanoid robot” industry chain last year. Benefiting from the explosive market, its net value surged by 99.27%, nearly doubling.

Since the beginning of the year, as the robotics theme cooled and related stocks sharply retreated, the fund’s net value has fallen about 23%, briefly ranking first in year-to-date declines. Additionally, two funds under South China public fund companies, heavily invested in robotics, have also fallen more than 20%.

Looking back at the spectacular “tech bull” last year, most tech stocks enjoyed valuation premiums. AI computing chips, low-altitude satellites, and the humanoid robot theme funds recorded returns of 50% or even doubled. Due to the significant profit effects, capital flooded into these high-valued concept stocks in the second half of last year, causing many funds to see explosive growth at their peak.

However, in 2026, with the market shifting rapidly, these mainline stocks from last year faced valuation and logical double hits. Many top-performing funds underperformed this year, with some “double-up” funds experiencing declines of over ten percent.

Some analysts point out that the main reason is that these high-performing funds last year adopted highly concentrated single-sector strategies. During a rising market, this approach maximizes flexibility through concentrated holdings; but during corrections, the lack of defensive measures turns into a major source of losses. “Profit and loss come from the same source; it’s the simplest yet cruelest rule in investing,” said a fund manager in North China.

Technology stocks remain the main theme

Although geopolitical influences caused energy and non-ferrous metals themes to lead performance at times this year, the funds that stand out still predominantly focus on technology.

As of March 20, GF Fund’s Yuanjian Wisdom Select led with over 49% gains. At the end of last year, its holdings were entirely storage concept stocks; additionally, funds like China Life Anbao Digital Economy, China Life Anbao Industrial Upgrade, and Red Soil Innovation New Technology, all with over 30% gains, also invested in various tech stocks.

“At the start of 2026, the A-share tech sector is undergoing a structural transformation,” said Tang Xiaobin, a fund manager at GF Fund. “From 2023 to 2025, it was a ‘big explosion’ of AI technology, with noise and chaotic competition. But 2026 may mark the ‘Darwin moment.’”

Xu Chengcheng, a fund manager at Industrial Securities Fund, believes that the future development of tech styles depends on the mutual confirmation of industry growth trends and actual performance realization. The certainty of performance within the tech industry is expected to become a core clue for 2026 tech-themed investments.

Xu further states that, taking artificial intelligence as an example, market perception has shifted from “concept narratives” to “commercialization realization” and “technological implementation certainty,” with significant differentiation within the sector. Amid overall high valuation levels in the tech industry, Xu observes that capital is increasingly focusing on niche segments with real profitability, autonomous control, and global competitiveness.

Guo Weiling, a fund manager at Dacheng Fund, also points out that the tech market in the first half of 2026 is expected to continue, mainly centered around AI. However, structural opportunities will be stronger than the overall market, and overall investment difficulty will be greater than in 2025.

Investors should pay attention to “crowding”

It is worth noting that during last year’s tech bull market, many value-oriented funds that emphasized “stability” also couldn’t resist including stocks like computing power and robotics. Driven by the AI supercycle logic, valuations of leading tech stocks were pushed to historic highs.

However, the investment logic for tech stocks will ultimately shift from “vision-driven” to “profit verification.” When concerns about “AI capital expenditure realization speed falling short of expectations” emerged at the start of the year, high P/E ratios became a Damocles sword hanging over net values. As the Fed’s rate-cutting pace fluctuates and the global AI industry chain enters a “cost pain period,” this high premium is experiencing a sharp mean reversion. The declines in robotics stocks and the sluggish performance of PCB and CPO sectors are examples.

Moreover, as profits attract large capital inflows into these sectors, the degree of position overlap also increases. Besides valuation factors, trading crowding is also a driver of performance reversals.

Data shows that in December last year, the CSI TMT Index’s daily trading volume remained between 200 billion and 250 billion yuan, far surpassing other sectors like consumer, cyclical, and financial, becoming the “main force” of A-share trading.

Additionally, some research reports indicate that institutional heavy buying in the tech sector, at the expense of reducing holdings in consumer and financial sectors, has driven these two sectors’ allocations to their lowest levels since 2010. The migration of funds from traditional sectors to tech has further increased the crowding in tech stocks.

A fund manager from a Shenzhen public fund told a securities reporter that once market sentiment shifts—such as the recent rise of dividend assets and value sectors—institutions will likely reduce holdings of last year’s popular stocks to rebalance or reposition. In an environment of shrinking buying, this collective retreat can easily turn into a “stampede.” “The robustness of last year’s rally determines how fierce this year’s sell-off will be,” the manager said.

The same fund manager further pointed out that the recent surge in “HALO” assets is ultimately due to the past two years’ outperformance of the AI sector compared to the broader market, prompting capital to seek more cost-effective targets. When risk appetite declines, these funds mainly hunt for companies with strong moat and irreplaceable operational advantages.