E Fund "Quits Liquor Stock Positions"

Author | Huang Yida

Editor | Zhang Fan

The South Korean stock market, which has outperformed all other global markets this year, has recently entered a sharp slump. Two heavyweight blue chips, Samsung Electronics and SK Hynix, have been continuously sold off, triggering frequent circuit breakers on the broader market. Financial products heavily weighted on leading South Korean stocks have also suffered huge losses recently. A typical example is the 2x long ETF tracking Samsung Electronics/SK Hynix, many of which have recorded pullbacks of over 60% in recent periods.

E-Fund Asia Select (hereinafter referred to as "Asia Select"), a QDII fund managed by Zhang Kun, also holds large positions in Samsung Electronics and SK Hynix. Driven by the previous AI sector bull market, the fund's net value performed exceptionally well. At the end of the second quarter, the South Korean stock market began to plummet. The fund's quarterly report shows that Asia Select significantly reduced its positions in Samsung Electronics and SK Hynix in the second quarter, and the market spoke highly of Zhang Kun's timely exit, bringing the former star fund manager back to the spotlight of investors.

At present, Zhang Kun manages 4 public offering funds in total. In addition to the aforementioned Asia Select, the two flagship products E-Fund Blue Chip Select and E-Fund High-Quality Select (hereinafter referred to as "Blue Chip Select" and "High-Quality Select") used to be top-tier products in the public fund industry. At their peak, Blue Chip Select had an AUM of nearly 100 billion yuan, and High-Quality Select also exceeded 20 billion yuan.

On July 21, Blue Chip Select and High-Quality Select released their 2026 Q2 reports. As benchmark products in the industry, the position changes of the two funds in the second quarter not only reflect changes in the market environment, but also present the latest pricing of assets held by leading public fund institutions and their judgments on future investment main lines, which are of great reference value for the entire market.

So, in the just-concluded second quarter, what major changes have taken place in Zhang Kun's investment strategy? What is the core logic behind these changes?

01 Significant Reduction of Positions in the Large Consumer Sector

The latest disclosed fund quarterly report shows that under the dual pressure of redemptions from fund investors and the decline of heavyweight stocks, the AUM of Blue Chip Select and High-Quality Select shrank sharply in the second quarter of this year, and their asset allocation structures also changed significantly accordingly. Reflected in specific data, both funds show a trend of double decline in share count and AUM, with the decline in AUM being particularly noticeable:

Blue Chip Select: The share count and AUM at the end of the second quarter were 13.4 billion units and 20.4 billion yuan respectively, down 1.8 billion units and 6.4 billion yuan month-on-month respectively, with a particularly large decline in AUM.

High-Quality Select: The share count and AUM at the end of the second quarter reached 1.7 billion units and 6.8 billion yuan respectively, down 240 million units and 2.8 billion yuan month-on-month respectively.

From a longer-term perspective, since Q1 2023, affected by continuous redemptions from fund investors, the share count of both Blue Chip Select and High-Quality Select has shrunk month-on-month for 14 consecutive quarters. The current share count of Blue Chip Select is less than half of its historical peak, and the current share count of High-Quality Select is about 55% of its historical peak.

Figure: Share count and AUM of Blue Chip Select and High-Quality Select; Data source: Wind, 36Kr

While the AUM shrinks, the changes in the asset allocation structure of the two funds are mainly reflected in the following two aspects:

1. The stock position ratio is significantly reduced, and the allocation proportion of cash assets rises sharply at the same time;

2. The funds continue to reduce positions in heavyweight consumer stocks, and the proportion of consumer stocks in total AUM continues to decline.

At the broad asset allocation level, data shows that as of the end of June this year, the stock position proportion of Blue Chip Select dropped from 93% in the previous quarter to 75%, while the cash allocation proportion rose 19 percentage points month-on-month to 25%; the situation of High-Quality Select is similar, with the stock position proportion dropping to 80% in the same period, and the total allocation proportion of cash and other assets is about 20%. The significant increase in cash ratio is partly estimated to cope with subsequent redemptions.

Figure: Broad asset allocation proportion of Blue Chip Select and High-Quality Select; Data source: Wind, 36Kr

From the perspective of investment style, Zhang Kun is a representative of veteran star fund managers who focus on the large consumer sector. According to Wind statistics, in recent years, the industry allocation proportion of large consumption (daily consumption + optional consumption) of Blue Chip Select has long been higher than 50%, and once reached 80% at the highest; since the establishment of High-Quality Select, the industry allocation proportion of large consumption has never been lower than 60%, with a median of about 70% in recent years.

However, since the end of 2024, both funds have continued to reduce their positions in consumer stocks. According to Wind's primary industry classification, the industry allocation proportion of large consumption of Blue Chip Select at the end of 2025 was about 72%, down about 8 percentage points from its historical peak (end of 2024). As for High-Quality Select, the 2026 Q2 report data shows that the industry allocation proportion of the large consumer sector is about 64%, down about 18 percentage points from its historical peak of 82% (end of 2024).

Figure: Industry allocation proportion of large consumption of Blue Chip Select and High-Quality Select; Data source: Wind, 36Kr

The top 10 heavyweight stocks of Blue Chip Select and High-Quality Select are also highly convergent, with leading Baijiu enterprises such as Kweichow Moutai, Wuliangye, Luzhou Laojiao, and Shanxi Fenjiu as core targets, while also holding large positions in Alibaba and Tencent. Judging from the position changes in the past year, the position adjustment direction of the two funds is basically the same, that is, significantly reducing positions in consumer stocks, mainly Baijiu stocks.

In the previous consumer bull market before 2021, leading Baijiu enterprises were "core assets" sought after by the market, and Kweichow Moutai was the core asset among all core assets, which was naturally a heavily weighted target for top-tier funds like Blue Chip Select. Today, the prosperity of the Baijiu industry has entered a downward cycle. In particular, the continuous slowdown of the performance of leading liquor enterprises in recent years is an important factor driving fund managers to reduce their positions in Baijiu stocks.

Looking at Zhang Kun's position reduction in Kweichow Moutai, E-Fund Blue Chip Select held 969,000 shares of Kweichow Moutai in the second quarter of this year, down 59% year-on-year and 47% month-on-month respectively; the situation of E-Fund High-Quality Select is similar, with its position in Kweichow Moutai reaching 528,000 shares in the same period, down 39% year-on-year and 19% month-on-month respectively.

Looking at the position changes of other heavyweight stocks, Blue Chip Select is significantly affected by large-scale redemptions from fund investors. Among its top 10 heavyweight stocks, only SMIC and Dongshan Precision have unchanged position counts, and the position counts of other heavyweight stocks have decreased significantly compared with the previous quarter.

After this position adjustment, the position proportion of leading Baijiu stocks in Blue Chip Select has dropped sharply from the long-term stable level of over 40% to 20%; the total position proportion of the top 10 heavyweight stocks has also dropped from 91% to 51% month-on-month. The trend of position changes of heavyweight stocks in High-Quality Select is similar, and due to relatively low redemption pressure, the overall position reduction range of its heavyweight stocks is also relatively smaller.

Zhang Kun's operation of reducing positions in Baijiu stocks is a microcosm of the continuous reduction of large consumption positions by public offering funds in recent years. Public data shows that as of the end of the second quarter of this year, the position proportion of the food and beverage sector (mainly Baijiu) in active equity funds was only 1.5%, down 2.4 percentage points month-on-month, which is not only far lower than the historical median of 11% during 2018~2022, but also far behind the electronic sector, the largest heavyweight sector in the same period (position proportion of 43%).

In addition to food and beverage, the position proportion of funds in other sub-sectors of large consumption has dropped to low single digits. Among them, the position proportion of funds in household appliances and trade retail has declined significantly, dropping to 1.1% and 0.4% respectively by the end of the second quarter of this year, down 0.7 percentage points and 1 percentage point month-on-month respectively. Other sub-sectors have also seen position reductions, but since their current position proportion is extremely low, there is barely any room for further reduction.

In terms of individual heavyweight stocks held by public offering funds, the trend of continuous reduction of large consumption positions by public offering funds can also be observed. In the top 10 individual stocks with the heaviest positions held by all active equity public offering funds in the second quarter of this year, there are no consumer stocks at all; the top 10 individual stocks with increased heavyweight positions in the same period mainly come from the electronic and communication sectors, and the electronic sector alone accounts for 8 seats. Among the top 10 individual stocks with reduced heavyweight positions in the same period, Kweichow Moutai, Wuliangye and Alibaba from the large consumer sector are included.

02 Why Do Public Offering Funds Reduce Positions in the Large Consumer Sector?

In recent years, the collective and continuous reduction of large consumption positions (including Baijiu, food and beverage, home appliances, social services and other industry sectors) by public offering funds is mainly the result of the combined effect of multiple factors such as macroeconomics, industry cycles, and style switches.

Looking back at history, the period from 2017 to 2021 can be called the golden age of the large consumer sector. At that time, benefiting from the core logic of consumption upgrading and high performance certainty, large consumption was regarded by investors as a high-quality track with long slopes and thick snow; the Baijiu sector in food and beverage was even the core target for public funds to hold in groups, with performance and valuation rising simultaneously, presenting a round of Davis double-kill market.

Figure: Trend of CSI Baijiu Index; Data source: Wind, 36Kr

With the change of the macro environment, especially the long-term weak economic recovery after the pandemic, the corresponding reshaping of consumption concepts has directly led to a significant slowdown in the performance growth rate of the large consumer sector. The core logic of past consumption upgrading has gradually transformed into consumption stratification. Consumers no longer blindly pursue high-end brands and premium prices, and their consumption behavior has become more rational and more cost-effective. Traditional high-end and sub-high-end consumption has been impacted as a result. The most typical case is high-end Baijiu, where the performance growth of leading liquor enterprises such as Kweichow Moutai and Wuliangye has slowed down significantly in the past two years, and the previous logic of valuation expansion is no longer sustainable.

At the same time, the penetration rate of many sub-sectors of large consumption has approached saturation, and the industry has maintained low growth for a long time under the stock game, such as white goods, black home appliances, condiments, and dairy products. Although relevant leading enterprises enjoyed a certain valuation premium in the last golden era with their steady performance, with the change of the macro environment, especially the adjustment of market expectations, the previously accumulated valuation premium has instead become a burden.

Therefore, the large consumer sector has experienced a quite long stage of valuation contraction, and fund managers actively reduce positions to digest valuation risks in order to ensure the safety of their portfolios. As some funds take the lead in reducing positions in consumer leaders, the decline in stock prices leads to a drop in the net value of funds, which in turn triggers redemptions from fund investors; in order to cope with redemptions, funds have to passively sell the most liquid core consumer assets, forming a negative feedback loop of "position reduction - stock price decline - redemption - further position reduction".

From the dimension of the industry inventory cycle, the pressure of destocking in distribution channels is also an important factor for public offering funds to reduce positions in the large consumer sector. Taking Baijiu as an example, at present, high channel inventory of many liquor enterprises leads to a decline in ex-factory prices, and even price inversion; at the same time, the intensity of competition in the stock market has intensified, the industry is facing severe internal competition, gross profit margin is under pressure, and performance is also dragged down. Faced with the continuous deterioration of financial indicators, it is reasonable for public offering funds to reduce their positions in relevant targets.

The impact of market style switching is also huge. Under the macro background of long-term weak recovery, the attractiveness of the consumer sector has decreased significantly in recent years, while the technology sector represented by the AI industry chain is in a super prosperity cycle. Hot themes such as large AI models, computing power infrastructure, AI Agent, and storage hardware keep emerging, driven by the market's money-making effect, capital mainly flows to industries related to "new quality productivity" represented by the AI industry chain, and large consumption has become the "outdated stocks" in the eyes of investors.

Driven by this round of AI industry chain bull market, public offering funds have significantly increased their positions in the electronic sector in the second quarter of this year, and the position proportion of active equity public offering funds rose 23 percentage points month-on-month to 43%, continuing to rank as the largest heavyweight industry; communication, as the second largest heavyweight industry, recorded a position proportion of 16% in the same period, up 3.8 percentage points month-on-month.

After a long period of valuation digestion, the valuation level of the large consumer sector has fallen back to the historical low range, with a relatively good safety margin. The continuous reduction of consumer positions in E-Fund's signature public fund products is not only a concentrated reflection of the downward prosperity of the consumer sector and market style switching in this round, but also marks that the consumer sector has completely bid farewell to the previous fund group holding market.

At present, the AI industry chain has entered a high-volatility stage. The South Korean stock market has triggered frequent "circuit breakers" in the past month, and the domestic semiconductor index, electronic index, Sci-Tech Innovation/Startup series indices have all experienced large adjustments in the