Tech funds ease purchase limits, managers say growth logic unchanged

Source: International Financial News

Several tech-themed funds have recently lifted their purchase restrictions, while a wave of new funds has been launched. This raises the question: is the technology sector poised for new investment opportunities?

According to International Financial News, since September, the technology sector has experienced a pullback from elevated levels, allowing valuations to digest somewhat. Multiple funds heavily weighted in tech stocks have raised their subscription caps. Among them, two funds under E Fund Management raised their large-amount subscription limits to 500,000 yuan, while a product under Zhong Ou Asset Management resumed large-amount subscriptions for non-individual investors.

Industry insiders noted that the growth logic of the tech sector remains intact, but from an investment perspective, divergence within the sector has become pronounced. The market is expected to trend upward with fluctuations in the fourth quarter, though attention should be paid to the impact of changes in the overseas macroeconomic environment.

Funds Ease Restrictions

On September 22, E Fund announced adjustments to the large-amount subscription limits for two of its funds—E Fund Information Industry and E Fund Information Industry Select—raising the single-day, single-account cap from 10,000 yuan to 500,000 yuan.

These two funds had tightened subscription limits in June, and this marks the first significant easing since then. According to Wind Data, as of the end of the second quarter, the two funds had net asset values of 21.144 billion yuan and 13.824 billion yuan, respectively, both managed by fund manager Zheng Xi. As of September 23, both funds had posted year-to-date returns exceeding 50%.

On September 3, Zhong Ou Information Technology announced the removal of restrictions on single-day, single-account subscriptions, conversions, and regular investments for non-individual investors, citing a desire to meet investor demand. Since the second half of the year, several other tech-heavy funds—including Hua Shang Advantage Industry, Hua Shang Balanced Growth, and Hua Tai Bai Rui Quality Growth—have also eased or lifted large-amount subscription limits.

Semi-annual reports show that as of mid-year, these funds were heavily invested in AI-related stocks such as Zhongji Innolight, Yuanjie Technology, AMEC, and Dongshan Precision.

Alongside the easing of equity fund subscriptions, September has seen a surge in new tech-themed fund launches. Wind Data shows that as of September 23, among the 55 newly established ETFs and their feeder funds, more than 15 were tech-focused, covering areas such as computing power, artificial intelligence, chips, and robotics. Notably, the ChiNext Computing Power Infrastructure ETF saw the highest demand, with nine similar products launched in September, raising a total of 5.37 billion shares.

Meanwhile, the tech sector has undergone a significant correction since its July peak. The STAR 50 Index, which hit an all-time high of 2,255.25 points on July 1, fell to a low of 1,516.2 points on September 11—a decline of over 30%. Sub-sectors such as optical communications and chips experienced heavy selling. As of September 24, the communication and electronics sectors had still gained over 34% year-to-date, ranking among the top two of the 31 Shenwan primary industries. However, internal divergence has become evident, with some previously overvalued stocks entering a phase of valuation digestion.

How to Invest in the Tech Sector

Commenting on the move to raise subscription limits for tech-themed funds, Zhang Pengyuan, a researcher at PaiPaiPai Wealth, said it reflects fund managers' confidence in the long-term value of the tech sector. He noted that the growth logic for industries such as AI, satellites, and software remains unchanged. After the sector's adjustment, structural opportunities have emerged, and lifting purchase limits may signal fund managers' optimism about their holdings' long-term prospects.

"Purchase limits were set earlier when the sector was overheated to prevent large capital inflows from diluting existing holders' returns. Now, with the market correction, raising caps allows funds to attract new capital, replenish positions, and buffer redemption pressure," Zhang added.

So how should investors approach the tech sector after the adjustment?

He Li, General Manager of Zhiyu Zhishan Investment, told International Financial News that valuations within the tech sector are now clearly diverging along two main lines.

First, the domestic tech chain, represented by the STAR 50 Index, still carries relatively high absolute valuations. "Its current trailing P/E ratio is 133 times, at the 80th percentile over the past decade, while its P/B ratio is near the 94th percentile. The narrative of tech security has led to high valuations and concentrated holdings," He said. He believes that under pressure from future refinancing and lock-up expirations, valuations of the domestic chain may face stress tests.

Second, the overseas-linked chain, represented by the ChiNext Index, has returned to neutral valuations. Its current trailing P/E ratio of 37 times is at the 25th percentile over the past decade—a moderately low level. Based on expected earnings and valuation data for 2026, He believes the index offers a reasonable match between valuation and growth.

Looking ahead, Ufund Asset Management noted in a recent outlook that with limited incremental capital, the overall market continues to exhibit a clear style rebalancing. While the market has largely priced in macro uncertainties, the fourth quarter is expected to see a gradual upward trend amid sector rotation. However, given uncertainties surrounding the U.S. midterm elections and ongoing disagreements over the pace of interest rate hikes, the potential for further overseas macro disruptions cannot be ignored.