1、2025 Investment Review

In 2025, the Fund delivered an estimated net asset value increase of 33.8%, with final figures subject to confirmation in the official valuation statements.

Global equity markets delivered broadly positive performance in 2025. Major indices including the S&P 500, the Hang Seng Index, and the CSI 300 rose by 16.4%, 27.8%, and 17.7%, respectively. AI-related industries were a key source of structural alpha during the year.

That said, the investment journey was far less linear than the final outcome might suggest. Early in the year, improvements in model efficiency driven by DeepSeek triggered market concerns around potential overcapacity in AI compute. In April, an unexpected tariff shock caused a broad market sell-off. In the second half, AI investment opportunities shifted from broad-based participation to increasing structural differentiation: segments such as the Google ecosystem, storage, and networking performed notably well, while assets tied purely to compute expansion delivered more muted returns. By November, discussions around a potential “AI bubble” intensified meaningfully. In retrospect, misjudgments at any of these inflection points could have led to materially different portfolio outcomes.

From a portfolio management perspective, our responses evolved accordingly. At the beginning of the year, while acknowledging that effective compute supply was increasing, we placed greater emphasis on its implications for accelerating AI inference adoption. We believed that as AI applications evolved from simple conversational use cases toward more complex tasks, overall compute demand would continue to grow exponentially. As a result, we maintained a relatively high allocation to AI-related assets.

In early April, following the sharp market drawdown triggered by tariff concerns, we assessed the shock as more likely a “contained disruption” rather than a systemic crisis. With risk premia rising sharply and market valuations approaching the lower bound of historically manageable drawdown ranges, we chose to maintain risk exposure while adjusting portfolio structure, rather than shifting into a defensive de-risking posture.

In the second half of the year, as AI opportunities became increasingly differentiated, we reallocated capital toward areas with greater visibility and structural certainty, including the Google ecosystem, storage, and networking, while reducing reliance on a single-dimension compute expansion thesis.

Overall, we maintained relatively high portfolio exposure throughout 2025, with core allocations across internet, semiconductors, cloud computing, consumer, and fintech sectors. AI remained a central cross-sector theme, with investments focused on leading AI applications, critical infrastructure, and best-in-class semiconductor manufacturers with durable competitive advantages.

 

2、2026 Outlook: Investment Opportunities

Macro and Valuation: A Greater Emphasis on Fundamentals

Looking ahead to 2026, the macro environment is expected to be less supportive of valuation expansion than in 2025. While interest rate cuts remain a medium-term direction, elevated government leverage, constraints on dollar credibility, and persistent inflationary pressures suggest a more measured and gradual easing path. As a result, both the pace and magnitude of declines in long-term risk-free rates are likely to be constrained.

Against this backdrop, equity risk premia are already near historical lows, limiting the scope for further valuation-driven returns. Investment opportunities in 2026 are therefore more likely to be driven by improvements in corporate fundamentals, business model evolution, and the strengthening of structural competitive advantages, rather than broad-based multiple expansion.

 

AI: Uncertain Aggregate Growth, Enduring Structural Opportunities

Market discussions around a potential AI “bubble” are not without merit. Current expectations of approximately USD 3 trillion in AI capital expenditures over the next three years face execution risks across funding availability, data center delivery capacity, and supply-chain absorption. As a result, simply betting that aggregate AI infrastructure investment will meet or exceed the most optimistic projections offers limited attractiveness in terms of both probability and payoff.

However, a more important and durable trend deserves attention: continuous improvements in AI capabilities and rapid declines in per-task costs are driving exponential growth in AI application adoption. Even if cumulative AI capex ultimately reaches a more conservative USD 2 trillion—below the most aggressive forecasts—the absolute scale remains substantial and highly meaningful for structural investment opportunities.

Historical precedents are instructive. Apple released the iPhone in 2007, with annual unit sales reaching approximately 200 million by 2015 before gradually peaking. Thereafter, both unit growth and average selling price expansion moderated. Yet Apple’s market capitalization increased by roughly tenfold following the peak in iPhone shipments. This was not driven by simple valuation expansion, but by a sustained evolution of its business model—from a single-product hardware company to a diversified ecosystem spanning multiple products and services, with a significantly strengthened moat.

Notably, Apple’s supply chain also generated numerous ten-fold structural opportunities after handset volumes peaked.

The AI industry may follow a similar trajectory. Even as aggregate infrastructure growth eventually moderates, the ongoing evolution from compute to storage, networking, applications, and broader ecosystems is likely to generate long-lasting structural opportunities across multiple layers and sub-sectors.

 

Other Focus Areas: Seeking Differentiated Sources of Alpha

Beyond AI, we continue to focus on fintech, consumer, and emerging markets as important complementary sources of alpha.

• Fintech and Financial Innovation: Finance is a large and inherently high-return sector. Any meaningful improvement in efficiency, product innovation, or business model transformation can give rise to long-duration, attractive investment opportunities.

• Consumer Sector: Since 2025, parts of the consumer sector have faced valuation compression amid concerns that AI-driven labor displacement may weigh on middle-class employment. While such concerns are not unfounded, broad valuation resets have increased dispersion within the sector, potentially creating new entry points for long-term investors.

• Emerging Markets: Differences across economies in growth structures, policy flexibility, and stages of industrial development continue to provide diversified sources of global alpha. Going forward, we aim to more actively identify structural opportunities with asymmetric payoff profiles in selected emerging markets.