Core Viewpoint - The recent trend of performance-driven funds implementing purchase limits is primarily aimed at controlling fund size to maintain the effectiveness of investment strategies, reflecting a cautious approach to managing potential market risks and ensuring stable growth for investors [2][10]. Group 1: Fund Purchase Limits - On November 22, China Europe Fund announced that starting November 24, the daily purchase limit for four funds managed by Lan Xiaokang will be reduced to 500,000 yuan [4]. - This year, over 230 active equity funds have announced the suspension of large purchases or general purchases, with many of these funds showing strong performance and reaching new net asset value highs [10]. - The recent limits on fund purchases are a response to the significant structural characteristics observed in the A-share market, which have led to concentrated investor interest in high-performing funds [10]. Group 2: Fund Performance - As of November 20, the one-year performance of several funds managed by Lan Xiaokang, including China Europe Dividend Enjoyment A and China Europe Value Return A, showed returns of 38.93%, 30.24%, and 41.68%, all exceeding their performance benchmarks [6]. - Other high-performing funds, such as China Europe Small Cap Growth A and China Europe Digital Economy A, reported one-year returns of 57.39% and 126.55%, respectively, placing them among the top tier of similar funds [7]. - The trend of limiting purchases among high-performing funds indicates a cautious stance from fund managers regarding the potential for market overheating and valuation bubbles in specific sectors [10]. Group 3: Investment Strategy Insights - Lan Xiaokang emphasizes the need to adjust investment strategies in light of global changes, advocating for a balanced allocation between precious metals and quality Chinese assets over the next 3 to 10 years [6]. - The cautious approach to fund management reflects a broader industry trend where fund managers are increasingly focused on the stability of net asset values and the long-term profitability of their investors [10].

1. Report Industry Investment Rating No relevant content provided. 2. Report's Core View - Small - cap style is a comfortable area for index - enhanced products, with current valuation quantiles and profit expectations being relatively advantageous. The small - cap index may have dual advantages in terms of profit and valuation, and small - cap quantitative funds have better excess return sustainability [1][6][16]. - The China Europe Small - Cap Growth Fund controls the position deviation, and its performance and win - rate are leading in the current year. Stock selection is the main source of excess returns [1]. 3. Summary According to the Directory 3.1 Small - cap Style: Comfort Zone for Index - enhanced Products, with Current Valuation Quantiles and Profit Expectations Relatively Advantageous 3.1.1 Small - cap Features: Multi - dimensional Growth, Rich Connotations, and Potential Dual Advantages in Profit Expectations and Valuations Compared to Large - caps - Since Q3 2024, small - cap indices such as CSI 1000 and CSI 2000 have performed prominently. In different quarters, different small - cap indices outperform the SSE 500 and SSE 300. For example, in Q4 2024, Q1 2025, and Q2 2025, CSI 2000 was dominant, while in Q3 2025, SSE 500 performed relatively well [6][7][8]. - In terms of industry structure, industries with high returns this year are mostly growth - oriented, and small - cap indices have a higher proportion in these industries. Industries with poor performance this year, such as banking and food and beverage, have a lower proportion in small - cap indices [10]. - Hot topics this year reflect the rich connotations of small - caps. The top three non - broad - based and non - Hong Kong - stock indices in terms of scale growth by Q3 2025 are mainly composed of small - and medium - cap stocks, providing diversified investment opportunities [11][12]. - Small - cap indices may have dual advantages in profit and valuation. The market generally expects small - and medium - cap indices to have outstanding growth in the next 1 - 2 years, and combined with their relatively low historical valuation quantiles, this indicates potential dual advantages [16]. 3.1.2 Fully Utilize Quantitative Advantages, with Better Excess Return Sustainability for Small - cap Quantification - As the index leans towards small - caps and the breadth becomes stronger, quantitative funds can more easily create excess returns. Taking data since 2020 as an example, the average annualized excess returns of SSE 50, SSE 300, SSE 500, and CSI 1000 index - enhanced funds are 0.50%, 1.64%, 2.77%, and 7.12% respectively [17]. - From historical data, investment opportunities in different sample pools change over time, but small - cap indices have long - term positive excess return investment opportunities. For example, CSI 1000 index - enhanced funds have achieved positive excess returns for the past five years [21][24]. 3.2 China Europe Small - Cap Growth: Breadth Advantage + Controllable Exposure, with Leading Performance and Win - rate This Year 3.2.1 Positioning Characteristics: All Aspects of Exposure are Relatively Controllable - Stock positions are relatively dispersed, with an actively - traded investment approach. The top ten holdings account for less than 15%, and the top thirty holdings account for less than 30% recently. The turnover rate is in the range of 6 - 10 times, and has remained above 9 times in recent periods [29]. - There is no excessive market - value sinking operation. Most of the holdings are small - market - value stocks, with stocks with a free - floating market value of less than 100 billion accounting for more than 90% in each period, and stocks with a market value of less than 2 billion accounting for less than 10% in H1 2025 [35]. - The proportion of GZSE 2000 component stocks is higher than the average of similar active equity products, and the deviation from the GZSE 2000 is relatively controllable. The industry deviation is also relatively small, with only some obvious deviations in individual industries in certain reporting periods [39][40][42]. 3.2.2 Performance: Leading in Similar Products in 2025 - Since its management, the product has stably outperformed the benchmark index. As of September 30, 2025, the cumulative return of China Europe Small - Cap Growth has reached 58.73%, while the benchmark has only risen by 17.37%. Since 2025, its performance has significantly exceeded the benchmark [46]. - This year, it has led in similar products. As of September 30, 2025, its return has reached 53.91%. It also has a prominent risk - return ratio, with an annualized Sharpe ratio of 2.65 and a Calmar ratio of 5.71, leading among similar products [49]. - It has significant advantages in drawdown control. In several market drawdowns since 2024, its drawdown has been significantly lower than the index and the average of similar products. For example, in February 2024, when the GZSE 2000 index fell 14.52% and the average drawdown of similar products was 14.74%, China Europe Small - Cap Growth only had a 13.27% drawdown, ranking in the top 9.0% of similar products [56][59]. - Quarterly, it has a considerable excess return and win - rate. In 9 out of 11 complete quarters since 2023, it has outperformed the GZSE 2000, with a win - rate of 81.8% and an average quarterly excess return of 2.94% [62]. - It also has an advantage in Alpha uniqueness. Compared with other GZSE 2000 index - enhanced products from 2024 to September 30, 2025, it is leading in both the win - rate of obtaining unique Alpha and the cumulative unique Alpha [65]. 3.2.3 Return Breakdown: Stock Selection Contributes Significantly to Returns - Using the Brinson model, it is found that stock selection is the main source of excess returns for China Europe Small - Cap Growth. Stock selection has made significant contributions to returns since its management, and trading can also contribute some excess returns [67]. - In terms of sector breakdown, innovation and technology, advanced manufacturing, and other sectors have made significant contributions to returns. The fund can obtain excess returns in most sectors through stock selection, especially in the advanced manufacturing sector [70]. 3.2.4 Product Feature Summary - There is no significant deviation in all aspects. Although it focuses on small - market - value stocks, it does not over - expose to micro - cap stocks. The industry exposure is relatively controllable, and the investment proportion in index component stocks is more than 50% in most reporting periods [74]. - The product performance is outstanding, with an impressive win - rate. As of September 30, 2025, its return has reached 53.91%, with an annualized Sharpe ratio of 2.65 and a Calmar ratio of 5.71. It has performed well in drawdown control since 2024 [74]. - Stock selection is the main source of excess returns. Stock selection contributes a large amount of excess returns, and trading also contributes some. Stock - selection returns come from multiple sectors, and the relative performance of stock selection in each sector is also good [74].

Core Insights - The public fund market in China has become active again, with the total scale of public funds exceeding 35 trillion yuan by July 2025, indicating a robust recovery compared to the previous year's market frenzy [2] - The current market rally shows a more stable and less volatile upward trend in A-shares and H-shares compared to the previous year [2] - There is a notable structural differentiation in the market, with high-growth sectors like technology and innovative pharmaceuticals performing well, while traditionally strong sectors like real estate and consumer goods are relatively weak [3] Company Strategy - China Europe Fund has introduced the "asset management industrialization" concept to fundamentally change the way funds are manufactured, aiming for clearer positioning and more stable styles in their products [4][5] - The fund's research and investment system upgrade focuses on three key aspects: specialization, industrialization, and digital intelligence, to enhance efficiency and decision-making [6][7] - The fund's approach includes a structured process involving design, production, assembly, and testing to ensure a comprehensive investment strategy that meets client needs [8][9] Performance Metrics - As of June 2025, the China Europe Convertible Bond A fund achieved a net value growth rate of 20.92%, outperforming its benchmark by 9.43 percentage points [7] - Other funds under China Europe Fund also showed strong performance, with the China Europe Digital Economy A fund growing by 93.07%, significantly exceeding its benchmark of 35.40% [12][13]