Changsheng North Securities 50 Enhanced Annual Report Analysis: Class C Shares Surge by 921%, Net Assets Grow by 365%, Management Fees Increase by 18 Times

Net Assets at the End of the Period: 96.82 Million Yuan, Year-on-Year Increase of 365% Profit Turns from Loss to Profit

In 2025, Changsheng North Securities 50 Component Index Enhanced Initiating Securities Investment Fund (hereinafter referred to as “Changsheng North Securities 50 Enhanced”) achieved a turnaround from loss to profit, with a significant expansion in net asset scale. The report shows that as of the end of 2025, the fund’s net assets totaled 96,816,059.49 yuan, an increase of 365.0% compared to the 20,827,102.93 yuan at the end of 2024. Among them, Class A shares net assets amounted to 26,369,657.88 yuan, and Class C shares amounted to 70,446,401.61 yuan.

In terms of profit, the fund achieved a net profit of 1,024,232.75 yuan in 2025, while the same period in 2024 (from the effective date of the fund contract to the end of the year) recorded a loss of 1,830,111.25 yuan, successfully turning a profit. Specifically, Class A shares had a profit of 3,210,122.10 yuan this period, while Class C shares incurred a loss of 2,185,889.35 yuan, mainly affected by the accrual of sales service fees and fluctuations in subscriptions and redemptions.

Net Value Growth of Class A/C Shares 26%/25.8% Underperforming Benchmark by 9 Percentage Points Tracking Error Exceeded Standards

In terms of net value performance, the net value growth rate for Class A shares in 2025 was 26.17%, while Class C shares were at 25.78%, both underperforming the benchmark return of 35.26% for the same period, with gaps of 9.09 percentage points and 9.48 percentage points respectively. Over different time periods, the fund’s net value performance continued to lag behind the benchmark in the past year, with Class A and Class C shares underperforming the benchmark by 1.00 percentage points and 1.15 percentage points respectively in the past six months.

It is noteworthy that the fund’s annualized tracking error was 9.4289%, exceeding the fund contract’s target of “annual tracking error not exceeding 8%.” The manager explained that this was mainly due to the fund being in the accumulation phase during certain periods of the reporting period, leading to a larger tracking error. They will strive to control it within the contractually agreed range in the future.

Investment Strategy: Constructing a Portfolio with Quantitative Multi-Factor Models Focused on Technology Growth Sector

The manager stated in the report that the growth style of A-shares ran throughout 2025, with significant internal rotation in the technology growth sector. In the first half of the year, innovative drugs and robotics indices led the gains, while in the second half, high-end manufacturing, telecommunications, and semiconductor industries showed outstanding performance. The fund strictly adheres to the index enhancement strategy, using a multi-factor model as the foundational framework, optimizing the portfolio by considering factors such as risk budget and transaction costs, and using quantitative methods to reduce trading costs and control tracking errors during index weight adjustments and subscription/redemption fluctuations.

From the stock investment portfolio perspective, the fund focuses on allocating to core sectors of the North Securities 50 Index, such as information technology and manufacturing. By the end of the period, stock investments accounted for 95.66% of the fund’s net asset value, with the top three holdings being Better Life (7.10%), Jinbo Bio (6.98%), and Naconor (4.35%), all of which are leading companies in their respective fields on the Beijing Stock Exchange.

Management Fees and Custody Fees Year-on-Year Surge by 18 Times Trading Costs 267,000 Yuan

In terms of expenses, the fund incurred management fees of 593,453.97 yuan in 2025, an increase of 1859.0% compared to 30,285.10 yuan in 2024; custody fees were 74,181.74 yuan, also up by 1859.0% from 3,785.63 yuan in 2024, with the surge mainly attributed to the expansion of the fund’s scale. Class C shares’ sales service fees were 167,041.38 yuan, accounting for 16.8% of the fund’s total expenses.

Regarding trading costs, the total trading costs for stock buying and selling throughout the year amounted to 267,454.56 yuan, with total stock purchase costs of 315,587,635.75 yuan and total stock sales income of 234,536,042.75 yuan, realizing a stock trading margin income of 4,295,026.18 yuan, a significant improvement compared to -37,162.70 yuan in 2024.

Class C Shares Surge by 921% Institutional Holdings in Class A Exceed 50%, Single Holder Risk Needs Attention

In terms of share changes, Class C shares became the main driver of scale growth. In 2025, the total subscriptions for Class C shares reached 502,088,805.82 shares, and total redemptions were 447,476,768.69 shares, with the end of the period shares totaling 60,538,761.99, an increase of 921.45% compared to the initial 5,926,724.86 shares. Class A shares at the end of the period totaled 22,581,250.20 shares, a growth of 36.2% compared to the beginning.

The holder structure shows that institutional holdings of Class A shares account for 52.46%, while individual holdings account for 47.54%; individual holdings of Class C shares account for 99.99%, with institutions holding only 0.01%. Notably, a single institutional investor holds 11,845,760.73 shares of Class A, accounting for 52.46% of the total Class A shares, which may face liquidity risks due to large redemptions. The manager warns that if this holder redeems a large amount, it could lead to fluctuations in the fund’s net asset value and liquidity issues.

Manager Outlook: Technology Growth Remains the Main Line Focus on Cyclical Recovery and Domestic Demand Opportunities

The manager believes that in 2026, the long-term outlook for A-share funds is positive, with a continuing trend of resident wealth entering the market, an increase in the proportion of insurance funds allocation, and the expected return of offshore funds to support the market. On the fundamental side, policies will focus on boosting domestic demand, with PPI-related cyclical sectors likely to lead the charge, and the consumer industry is expected to gradually recover. The internal transition probability of the technology growth sector is increasing from “technology going overseas” to “domestic applications,” with the implementation of technologies such as artificial intelligence expected to enhance overall productivity.

Risk Warning: The fund’s tracking error remains above the contractually agreed level, necessitating caution regarding fluctuations in the effectiveness of quantitative models; the liquidity of individual stocks on the Beijing Stock Exchange is relatively low, which may exacerbate portfolio adjustment difficulties; there is a high concentration of single institutional holders, posing liquidity risks. Investors may focus on the fund’s subsequent tracking error control and structural opportunities in the technology growth sector.

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Editor: Xiao Lang Quick Report