Why hasn't the lively Chinese New Year theme gained popularity? How will the US tariff adjustments impact the A-shares? Frontline insights from fund companies

The A-share market welcomed its first trading day after the Spring Festival holiday. The Shanghai Composite Index surged with high volume, marking a “good start,” but a subtle contrast to the lively scenes during the holiday, such as the “Cyber Spring Festival Gala” and travel consumption, is the significant cooling of some popular themes like film and television, artificial intelligence, computing power, and robotics, which were once highly anticipated.

On February 24, film and television ETFs fell nearly 8%, with industry-themed ETFs such as gaming, Hong Kong internet, media, AI, and cloud computing leading declines. Market humorously commented, “The teachers who praised robots, computing power, and AI during the Spring Festival are now silent; the teachers who praised movies have left the group.”

Meanwhile, overseas markets during the holiday were not calm: the U.S. Supreme Court overturned previous tariffs, and the Trump administration quickly announced new tariffs under the guise of “repackaging,” signaling a renewed escalation of Middle Eastern geopolitical conflicts.

Against this backdrop of multiple internal and external factors, how will the post-holiday market perform? Where are the main investment themes? Several public fund managers provided immediate insights and strategies for the future market.

First Day After the Spring Festival: Hot Themes Fade, How Do Fund Companies View This?

On the first trading day of the Year of the Horse, the three major indices all closed higher, but sector performance was highly differentiated. Cyclical sectors such as cultivated diamonds, phosphate chemicals, and oil and gas extraction led gains, while previously popular AI application themes like DeepSeek and Kimi declined sharply. Some hot themes from before experienced divergence or even retracement. The “Spring Festival blockbusters” concept, which was widely discussed, did not ignite the market as expected. Why did the lively themes during the Spring Festival cool down?

This divergence reflects market funds’ reallocation under multiple influences. “The spring turbulence of 2026 has partly shifted to January, and growth styles before the holiday have already undergone a substantial realization. Coupled with possible regulatory cooling measures and significant ETF outflows, the index is expected to fluctuate mainly in February,” said Jin Ying Fund.

This indicates that some profit-taking occurred after the holiday, putting short-term pressure on tech themes.

Deeper reasons include risk avoidance and defensive positioning by funds. Some fund managers believe that although domestic positive factors have accumulated, overseas macro uncertainties and geopolitical risks during the holiday period significantly suppressed overall risk appetite. Global funds tend to favor safe-haven assets, which to some extent diverted capital from high-risk themes in the stock market.

Additionally, Guotai Fund reviewed the market patterns after the Spring Festival, noting that within 5, 10, and 20 trading days post-holiday, the probability of market gains gradually increased, with a style characterized by “small and medium caps outperforming large caps, and growth outperforming.” While long-term growth remains dominant, short-term leadership often depends on event-driven catalysts. During the Spring Festival, advances in overseas large models, changes in U.S. tariffs, and U.S.-Iran geopolitical conflicts became new catalysts, shifting market focus from the simple “Spring Festival excitement” to “geopolitical conflicts” and “policy games.” As a result, sectors like non-ferrous metals and oil and gas performed more prominently on the first day after the holiday.

In summary, the so-called “Spring Festival themes cooling off” is essentially a normal style rebalancing and risk appetite adjustment after the previous surge in tech stocks, amid rising overseas uncertainties. Fund managers pointed out that funds have not exited the market but are shifting from pure theme speculation to more certain performance and defensive sectors.

Morgan Asset Management also warned investors that, given the overall high valuations of tech stocks, any short-term emotional fluctuations causing mispricing could present better entry opportunities.

What Impact Does the Reshaping of U.S. Tariffs Have on the Market?

During the Spring Festival holiday, tariff policies across the Pacific experienced dramatic swings. The U.S. Supreme Court ruled that “reciprocal tariffs” were illegal. However, the White House quickly invoked Section 122 of the Trade Act of 1974, announcing an additional 15% tariff on imports globally for 150 days. This “new replaces old” drama raises questions about its impact on global markets and the A-share market.

Morgan Asset Management interprets this as likely limiting the scope and influence of U.S. tariffs, since the Supreme Court’s ruling on the illegal status of IEEPA tariffs may constrain overall tariff measures. This could help control U.S. inflation further and potentially stimulate short-term consumption due to some tax refunds. Conversely, Huatai Fund remains cautious, noting that although Trump raised tariffs to 15%, the time and rate limits under Section 122 mean it cannot serve as a long-term stable tariff basis. Short-term policy uncertainties still exist.

Jinying Fund believes that if the broad 10% global tariffs are truly implemented and further escalated, they could have profound impacts on export chains and global industrial restructuring. In this context, consumer sectors benefiting from domestic demand and policy support—such as automotive and home appliances—are relatively more defensive and offensive.

This tariff turmoil not only affects trade flows but also deeply impacts dollar credit. Yongyin Fund points out that with the weakening independence of the Federal Reserve and rising deficit rates, the credibility of the dollar and U.S. Treasuries is being eroded. Although the Supreme Court’s ruling negated old tariffs, it also exposed the chaos and uncertainty in U.S. trade policy, reinforcing the global “de-dollarization” trend. Countries like Denmark, Poland, and Sweden are selling U.S. Treasuries or increasing gold holdings.

Huatai Fund agrees, noting that the macro structural factors supporting gold have not fundamentally reversed, including ongoing central bank gold purchases under de-dollarization and the long-term credit erosion of the dollar driven by U.S. fiscal policies. They recommend adopting a prudent asset allocation approach to gold investments.

Future Investment Strategies: Fund Companies Recommend Focusing on Three Main Themes

Faced with a complex start, how to identify main investment themes amid volatility is a key concern. Several fund managers have provided clear guidance, mainly emphasizing two core themes: technology growth and cyclical/resource sectors, along with high-dividend assets as a defensive bottom.

Theme 1: Emerging Technology, especially AI and robotics. Despite a correction in tech stocks before the holiday, nearly all institutions agree that technology remains a key investment theme.

Morgan Asset Management advises maintaining a mid-term focus on technological industry trends, emphasizing deepening in AI and related fields. Focus areas include: 1) AI infrastructure (semiconductor equipment, optical modules, computing power support like gas turbines and liquid cooling); 2) AI applications and end-products (robotics being central); 3) “14th Five-Year” emerging industries (commercial aerospace, quantum technology).

Jinying Fund also favors AI + humanoid robots, expecting a shift from “event-driven” to “scenario-based” development throughout the year. They suggest paying attention to midstream components (gear reducers, servo motors, sensors) and computing power chains (storage chips, PCB/IC substrates).

Theme 2: Cyclical and resource sectors under the dual logic of price hikes and risk hedging, especially gold. As PPI expectations recover and geopolitical conflicts intensify, resource allocation value becomes prominent.

Yongyin Fund strongly favors gold stocks, reasoning that: geopolitical uncertainties and rate cut expectations are positive factors; gold mining companies maintain high growth, with current PEs of only 10-15, well below historical valuation centers, offering significant valuation repair potential and a chance for both earnings and valuation to double (Davis double play).

Jinying Fund recommends focusing on cyclical sectors benefiting from price increases, such as oil and petrochemicals, non-ferrous metals, and infrastructure-related materials and chemicals benefiting from the “14th Five-Year” construction start. Guotai Fund also believes that, in the medium term, the focus on price hikes remains the market’s main concern, especially as the Q1-Q2 construction season will test the strength of price increases.

Theme 3: High-dividend and domestic consumption sectors as “stabilizers” in volatile markets. During periods of market divergence, high-dividend assets offer stable returns. Jinying Fund suggests using banks, energy, telecommunications, and utilities as core holdings to hedge against overseas volatility and geopolitical risks.

Regarding domestic consumption, Morgan Asset Management and Great Wall Fund are optimistic about sectors benefiting from Spring Festival data and service consumption. Morgan Asset Management highlights that Hong Kong stocks have many leading companies in service consumption, with structural advantages in travel and consumer sectors. Great Wall Fund recommends focusing on consumer services, food and beverages, and building materials—these sectors are at bottom levels in expectations and holdings, with potential for turning points.