Qingdao Luxiu's tech fund returned 76% this year.

Big gains, selective bets

Qingdao Luxiu Investment Management Co.'s technology-focused private fund posted a 76% return in 2026 so far, placing it in the top 2% among 10,308 peer products, according to fund tracker Shenzhen PaiPaiWang Investment & Management Co.

Luxiu's Lvjing Fund didn't chase every hot idea this year — it concentrated its bets on a few names that the team believed could deliver, and those picks drove most of the returns. Yun Bingwang, an investment officer at Qingdao Luxiu, said the fund concentrated on global tech names and consumer plays where it saw durable demand and valuation gaps the market had misread.

Two moves Yun highlighted were early dip buying of Apple Inc. Shares in late 2022 and sizable stakes in PDD Holdings Inc., owner of bargain-focused platforms including Temu and Pinduoduo's domestic business. Yun said the market underestimated a post-Covid shift by Chinese consumers back toward higher-priced goods, a trend that helped PDD rebound.

Spurning the AI hype

Yun said they’re watching how AI is changing big tech, but they haven’t jumped into AI stocks. “There are huge fundamental risks, especially for public safety, in AI at this current stage,” Yun said in an interview. He added that the uncertainties keep the team from making fresh AI-driven investment calls.

The fund manager drew a parallel to the private tutoring boom in early 2021, when a feeding frenzy ended after a sudden regulatory overhaul that wiped out value for many firms. Yun said missing out on this year’s AI winners is preferable to getting caught in another policy-led shock.

Where AI has driven returns

That said, AI has powered big gains across China’s stock market this year. Data from East Money Information Co. Show that six of the top ten performers on the benchmark gauge this year were boosted by AI-related demand, with Dawning Information Industry Co. Leading that group after a roughly 73% advance.

Top stock-focused mutual funds also counted software, media and semiconductor names among their largest holdings, East Money data show. That trend reflects a broad market rotation into companies seen as direct beneficiaries of the AI investment cycle — a rotation Luxiu has watched but chosen to largely sit out.

Strategy and risk control

Luxiu pairs concentrated positions with a cautious stance on risk, according to Yun. Yun described the firm’s process as scenario-driven: seek positions where the upside is clear and the downside is limited by fundamentals, cash flow or structural demand. If a sector seems to be moving on momentum rather than earnings or cash flow, the team usually backs off.

The fund’s choice of PDD and Apple illustrates that method. PDD was bought after a share-price slump left the stock, in Luxiu’s view, mispriced versus the company’s ability to capture changing consumer preferences. Apple was accumulated at a deep discount late in 2022, when Luxiu judged the pullback overstated the company’s long-term prospects.

That same caution applies to AI. Yun flagged public-safety concerns and other open-ended risks tied to AI deployment as reasons to delay broad exposure, even as some investors chase oversized short-term gains.

Market implications

The Luxiu fund’s stance highlights two competing forces in China’s market: concentrated winners tied to new technologies, and selective investors who prize safety and cash-flow visibility. For now, Luxiu sits with the latter camp.

So far this year, that stance has worked: the fund has significantly outpaced its benchmark. The fund outperformed the CSI 300 Index by 88 percentage points, according to Shenzhen PaiPaiWang. Yet it also means Luxiu missed some of the rally in pure AI plays — an outcome Yun framed as preferable to being exposed to unpriced regulatory or public-safety shocks.

Investors and fund managers watching China face a similar trade-off. Some are chasing AI-related growth stories that have lifted software, chip and cloud-services names. Others are paring exposure where valuations look stretched and where governance or policy shifts could rapidly change outlooks.

What Luxiu is watching

Luxiu continues to monitor developments in AI, Yun said, particularly how the technology affects revenue models and competitive positions at large tech platforms. The fund is also tracking shifts in consumer preferences as China moves further into a post-Covid economic cycle, seeking companies that can capture durable revenue gains.

Yun emphasized process over headline themes. He said Luxiu will buy into thematic areas once uncertainties narrow and potential policy or safety risks are better understood. Until then, the firm prefers mispriced global tech names and selective domestic consumer stocks.

Fund performance in context

Few funds have matched Luxiu’s performance this year. The fund’s ranking among more than 10,000 private products reflects a combination of stock selection and timing. Shenzhen PaiPaiWang’s data place Luxiu in the top 2% of that broad peer group.

At the same time, market leadership has been fragmented. While Luxiu succeeded via concentrated picks outside the AI mania, a sizeable portion of the benchmark’s best-performing stocks gained from direct AI exposure. That divergence shows how different strategies have produced markedly different outcomes through the same market cycle.

Investor takeaways

Investors should note that avoiding crowded trades can be as profitable as joining them — Luxiu's returns underline that point. Yun’s comparison to the private tutoring episode in 2021 reinforced his view that regulatory or safety shocks can erase gains very quickly.

Other managers will have to decide whether short-term AI gains are worth the potential long-term regulatory or safety risks. Some will keep leaning into AI winners. Others will limit exposure until earnings and regulatory clarity improve — the stance Luxiu has taken so far.

Related Articles

"There are huge fundamental risks, especially for public safety, in AI at this current stage," said Yun Bingwang, investment officer at Qingdao Luxiu Investment Management Co.