Chinese tech‑focused funds that doubled in H1 tumble 30% in July

In the first half of 2026, 199 Chinese active‑equity funds achieved net‑asset‑value (NAV) gains of at least 100%, largely driven by AI compute, storage‑chip and lithography‑machine stocks. The funds, dubbed “double‑funds,” attracted massive inflows, with some expanding to around CNY 200 billion in assets. Starting in July, the AI‑related sector faced a sharp sell‑off, with the broader technology segment falling more than 30% in weeks. From July 1 to August 4, the average return of the 199 funds turned negative, posting a –31.64% decline.

Two flagship funds illustrate the reversal. Guolian An Technology Innovation Fund, which held an 85% exposure to storage‑chip leaders such as Demingli, Bawei Storage and Zhaoyi Innovation, posted a 107.47% H1 gain but saw its NAV drop 40.67% over 25 trading days, leaving a year‑to‑date return of just 23.08%. Southern Semiconductor Industry A, heavily weighted (88%) in lithography‑machine makers like Chipsource Micro and Wave Optoelectronics, fell from a 102.80% H1 gain to a 23.27% YTD return after a 39.22% NAV decline. Fund managers attribute the downturn to crowded trades, global sentiment shifts and short‑term profit‑taking rather than a fundamental industry reversal, and they expect the storage segment to remain a long‑term growth driver.