Who Stands to Lose the Most from POP MART’s Downturn?

In the ever-evolving world of investing, fortunes are made and lost with each shifting market trend. For a generation, the darling of the investment world was the premium liquor, Moutai. Now, it seems, the trendy collectible figures from Pop Mart, specifically its Labubu series, have become the new “Moutai” for younger generations.

This shift in consumer preference hasn’t been lost on some of the industry’s leading fund managers. As Pop Mart’s stock has surged on the Hong Kong Stock Exchange, experiencing a phenomenal tenfold increase, prominent investors, who once had significant holdings in Moutai, are now pivoting. One such figure is Hu Xinwei of ChinaAMC.

Hu rose to prominence after taking the helm of ChinaAMC’s consumer-focused funds in 2016. He demonstrated a knack for understanding and capitalizing on the white spirits sector, quickly climbing the ranks.

In 2019, Hu’s fund soared to the top of the industry, boasting a five-year return of 240.09%. During its peak in 2021, the fund’s assets under management reached a staggering $10.6 billion, earning Hu a spot among the “Big Four” consumer fund managers, alongside Zhang Kun, Xiao Nan, and Liu Yanchun.

The subsequent narrative, however, is familiar: the performance of Moutai and similar stocks began to decline. Consumer funds faced significant setbacks, experiencing fund size reductions and generating controversy along the way.

Consider Hu Xinwei’s flagship product, ChinaAMC Consumer Sector Mixed. By June 2025, the fund’s net value had plummeted from its peak of $1.38 to $0.63, a loss of over 50%. Over the past three years, the fund has significantly underperformed its peers.

However, ChinaAMC Consumer Upgrade, managed by Hu, has posted gains of approximately 20% this year. This is largely attributed to Hu’s decision in the first quarter to reduce holdings in Moutai and make Pop Mart the third-largest stock in his portfolio. Additionally, Tencent, Xiaomi, and Alibaba also feature prominently in the portfolio. Notably, only Luzhou Laojiao and Moutai, two liquor stocks, remain in the top ten holdings, a significant reduction from the seven liquor stocks held at the peak.

This shift raises two points of contention. Firstly, the stark performance disparity between similar investment products managed by Hu Xinwei has stirred concerns of unfair treatment for investors. Secondly, the question arises whether entering Pop Mart investments, which has increased ten times in value in the last 18 months, is a case of capitalizing on the market’s momentum. Additionally, will Hu’s choices lead to the same situations, as when he was holding Moutai in 2021 during its peak.

The broader reality for ChinaAMC paints a similar picture: a dramatic decline in its standing in the competitive fund industry. It has slipped from its prominent position to just outside the top ten in recent years.

In 2024, ChinaAMC’s annual revenue declined 10.12% to $6.67 million. Net profit was $2.13 million, up 9.33% year-on-year, with market ranking No.9. The company’s performance depended on a reduction in costs and improved efficiency. In terms of non-monetary public offering fund scale, ChinaAMC held the tenth position in 2024. This was achieved through lower fees, sacrificing profits to gain scale, and strengthening bond offerings.

With public funds undergoing reform, can Hu Xinwei and ChinaAMC reverse their course?

It appears that for Hu Xinwei in investment choices, there is “a shift to the left, and Zhang Kun to the right?”

ChinaAMC has long been distinguished by its active equity management, fostering a cadre of star fund managers including Hu Xinwei, Lao Jenan, Lei Ming, Liu Jiang, and Yang Jin. However, with the waning of the public fund narrative, the glamour of these fund managers has faded.

As for Hu Xinwei, current circumstances pose a serious performance challenge. The funds he currently manages, as well as returns, are split even.

Upon searching “Hu Xinwei” on Baidu News, the top search result is a story titled “Hu Xinwei lost billions after becoming famous in business. It also received $3.33 million in management fees! Investors saw a run on the stock and had to redeem $5,2 million.” This article provides a summary of the performance of his products in recent years. It is basically summarized as “Hu Xinwei managed a total scale of more than 70 billion, or around $10 billion, which brought enormous losses of more than 30 billion to investors; at the same time, the fund company made a lot of money by charging management fees.”

Beyond the overall decline in consumer sector shares in recent years, Hu Xinwei’s products also do not perform well. ChinaAMC’s consumer sector mixed funds have consistently underperformed. The performance of the best type of fund, which is ChinaAMC consumer upgrade mixed funds, has been outside of the top 300. Is Hu Xinwei no good, or is his style not suitable for the current landscape?

Hu Xinwei once shared his stock selection philosophy, by “finding companies that perform well in good industries.”

In the 2024 fund annual report, Hu Xinwei began emphasizing dividend yield as his standard for investment, observing that “the static dividend yield of many companies even ranks among the top in the entire market.” In other words, “under the new situation, investment to evaluate leading consumer companies needs to be updated, and it is recommended to hold some dividend income.”

This viewpoint is similar to Zhang Kun’s. However, unlike Zhang Kun, Hu is more flexible. In practice, he adheres to the principles of controlling positions, allocating assets relatively evenly, and closely monitoring the fundamentals of industries and individual stocks.

One can almost categorize consumer fund managers based on their investments in Moutai and Pop Mart into four types:

There are “explorers,” such as Nong Bingli of Invesco Great Wall Quality Evergreen Mixed A, who “abandoned” Moutai in Q1 of 2024, embraced Pop Mart, and generated a product return of 41.62% in 2024.

There are “chaser,” like Hu Xinwei, who in Q1 of 2025 increased their holdings of Pop Mart by 1.5 million shares through the ChinaAMC Consumer Upgrade Mixed A and the ChinaAMC Consumer Selected Two-Year Holding Stock A, which is the most “aggressive” when it comes to funds.

There are “stalwarts,” such as Zhang Kun, who sold all of his Pop Mart holdings in Q3 of 2022 and didn’t buy more after this. Zhang’s cautious style does not facilitate buying at a higher prices. Another type is “profit takers,” like Zhou Zhong of Bank of Communications Qidao Mixed, who made a heavy investment in Pop Mart in June 2024 and sold 1.05 million shares in Q1 of 2025.

Different investment styles don’t make a clear distinction on what is good or bad. This depends on the specific investment stage, environment, and other factors. Whether Hu Xinwei is seizing the tail end of Pop Mart’s success or still benefiting from an upward trajectory remains to be seen. After all, when “chasing the wind,” the fear of a sudden reversal is real.

This is backed by Hu’s past statements behind his approach of adding positions in Pop Mart, “Investors often make the mistake of purposefully avoiding stocks that are obviously good and focusing on new, small, and unusual stocks. This shows a lack of perspective.”

If Pop Mart’s stock price were to decline in the future, it is estimated that Hu would not adjust his holdings, either. He states, “From a long-term perspective, excellent companies in the market will certainly fluctuate and rise in the long run. Therefore, it is desirable to maintain a medium-to-high stock position as much as possible and obtain returns through industry and individual stock selection.”

It is recommended for investment fund investors to pay attention to Hu Xinwei’s regular reports, especially the changes in the details of “the fund manager’s use of its own funds to invest in the fund in the reporting period.”

In the details, Hu Xinwei was the subject of redemption on July 27, 2023, with ChinaAMC Consumer Sector being redeemed for 4.9677 million shares and a total of $4.24 million. ChinaAMC Consumer Upgrade A was redeemed for 4.1606 million shares, with a redemption value of $1.1 million, for a total of $5.4 million. The net value of the aforementioned two funds began their steep declines thereafter.

When the actions taken by Hu Xinwei were examined, a senior industry observer stated, it may be “compliant, but not in line with emotions.” Like, when faced with a road block, the driver should jump out of the car, how will the passengers trust the driver? From this perspective alone, Zhang Kun’s move to limit the funds’ purchase at high points to preserve its credibility is noteworthy.

The situation of several other star fund managers at ChinaAMC include: Lao Jenan’s many products are struggling. Lei Ming has moved into private equity investment. Liu Jiang has resigned. Yang Jin, and with the exception of ChinaAMC Problem Entertainment Mixed, which may perform relatively for its class, the others have all underperformed.

Facing a collective stumble for star fund managers, those hired from outside ChinaAMC have also not proved themselves. The new generation of fund managers, such as Zhang Wei, has a bright performance. However, with limited management experience, it is still difficult for him to carry the flag. It has become apparent that ChinaAMC’s decline is inevitable.

However, aside from a talent gap, ChinaAMC faces other challenges.

For example, ChinaAMC has a somewhat unbalanced product layout. The company places a heavy emphasis on its “active investment capabilities as its brand characteristic,” which leads to a significant lag in its passive product lines. Within the active equity section, the company is overly focused on the consumer, pharmaceutical and TMT sectors, and therefore lacks cross-market allocation capabilities.

When emerging industries like new energy and semiconductors are growing, ChinaAMC has missed the boat due to entrenched biases centered on “poor industry structure and unfavorable business models.” The singular approach has amplified performance volatility in market style shifts and restricted investors’ choices.

One important element is that ChinaAMC missed the historic opportunity for the development of index funds. In November 2022, ChinaAMC launched an ETF brand called “Zhineng Tianfu.” This occurred when competitors such as Hua Xia and E Fund Management had already established an unshakeable advantage in the ETF field.

At the end of 2024, the scale of passive index funds was $547 billion, exceeding the $476 billion for active equity funds. First-mover advantages are important in the index fund market, which has a high degree of similarity. ChinaAMC’s delayed layout has pushed it into a vicious cycle of fee reduction, making it hard to overtake competitors.

These issues stem from deeper problems in corporate governance and investment research culture. The principles of “long-termism” and “customer first” established during the tenure of founder Lin Lijun gradually eroded under the lure of scale expansion.

During the market’s peak in 2020–2021, rather than following the example of restricted purchases in 2015, ChinaAMC dramatically issued new funds, harvesting scale. Star fund managers, such as Hu Xinwei and Lao Jenan, were “over-leveraged,” and were forced to manage large sums of money outside of their management capabilities. Ultimately, this led to a collapse in performance and a decline in reputation.

Currently on the Shanghai public offering fund market, ChinaAMC has also been overtaken by Guofu Fund Management.

For Hu Xinwei, investing heavily in Pop Mart may be a new “gamble” in his career. As for ChinaAM, the central question is whether it addresses how to rebuild its research and trust system to maintain investor trust, which is a matter of survival.