As 2026 passes the halfway mark, reform of China’s mutual fund industry has also reached a critical stage.

One year has passed since the implementation of the Action Plan for Promoting the High-Quality Development of Publicly Offered Funds, and a comprehensive package of reform measures is reshaping the industry’s underlying development model. As an important vehicle for translating investment research capabilities into market offerings, serving household wealth management needs, and supporting the real economy, fund products are assuming ever greater strategic importance. As industry transformation deepens, how to build a product offering system aligned with the requirements of high-quality development and establish long-term core competitiveness through stronger “product capabilities” has become a fundamental question that every mutual fund manager must answer.

In response to the long-term restructuring of value creation across the asset management industry, GF Fund Management has anchored its strategy around the goal of “creating sustainable and high-quality investment experiences for clients,” and is advancing systematic capability upgrades across the entire value chain along two key dimensions: comprehensive product offerings and outstanding product quality. On the one hand, the Company is enhancing its product universe across multiple asset classes, strategies and markets to better meet the allocation needs of different types of clients across economic cycles and market environments. On the other hand, it is establishing a quality control framework spanning the entire product life cycle, creating a closed-loop management system that both protects investors’ interests and preserves appropriate flexibility for active investment management.

Under GF Fund Management’s long-term operating philosophy, “product capabilities” are the most tangible manifestation of an asset manager’s professional strengths. The two pillars of comprehensive offerings and outstanding quality run throughout strategy, investment research and client services, forming a core foundation for high-quality development.

Product Leadership: A Core Competitive Advantage in the New Era of High-Quality Development

Following the implementation of the high-quality development action plan, the industry has formally shifted toward a value-creation-oriented model. A wide range of product innovations have been introduced, responding simultaneously to the needs of the real economy and household wealth management.

Against this supportive policy backdrop, equity funds focused on technological innovation have been among the first to benefit from the convergence of policy and capital flows. While seeking to generate excess returns for investors, these products also help support technological innovation and industrial upgrading. At the same time, diversified investment tools—including technology innovation bond ETFs, pension FOFs, public REITs and QDII products—continue to expand, while funds adopting floating management fee structures are increasingly moving toward regularized registration. The industry’s product offering system is undergoing a comprehensive upgrade, and product capabilities have become a key competitive lever for asset managers.

As the industry landscape is reshaped, the ability to translate the principle of “putting investors first” into outcomes that are tangible, measurable and capable of standing the test of time has become a new benchmark for evaluating product capabilities. GF Fund Management places investors’ sense of investment gains at the core of its operations and continues to optimize its product ecosystem in line with industry reforms, delivering results across both investment performance and investor cost reduction.

In terms of investment performance, supported by its long-established investment research platform and forward-looking product positioning, GF Fund Management has continued to demonstrate professional value amid the structurally differentiated market environment over the past year.

According to data from the Galaxy Securities Fund Research Center, as of the end of June 2026, 142 of the Company’s funds—based on primary share classes only, as also applies below—recorded one-year NAV growth rates exceeding that of the CSI 300 Index. Among them, 137 funds generated returns above 30%, 81 exceeded 50%, 54 exceeded 70%, and 38 exceeded 100%, while six funds achieved NAV growth of more than 200%. The funds that more than doubled in value covered a broad range of categories, including ordinary equity funds, equity-oriented hybrid funds, flexible allocation funds, enhanced index funds and passive index funds.

From an excess-return perspective, data from Guotai Haitong Securities showed that the Company’s actively managed equity funds delivered an excess return of 28.12% over the past year. In terms of peer rankings, 123 products ranked within the top one-third of their respective Galaxy Securities Level-3 fund categories, 94 ranked within the top quartile, and 37 ranked among the top ten in their categories.

In terms of investor holding costs, on top of building a solid performance foundation through professional investment capabilities, GF Fund Management has systematically optimized fee structures with the objective of sharing the benefits of industry development with investors and improving their overall investment experience.

On the one hand, the Company was among the first in the industry to reduce fees on actively managed equity funds and has subsequently extended fee reductions to a wider range of product categories, including equity index funds and QDII products. To date, more than 100 products have completed fee reductions, meaningfully lowering investors’ long-term holding costs.

On the other hand, the Company has actively promoted innovation in fee structures. It was among the first to launch funds with performance-linked floating management fees, introducing an alternative to the traditional fund fee model. Under this approach, management fees are closely linked to the holding period of each fund unit and the excess return generated during that period, thereby creating stronger alignment of interests and greater sharing of both returns and risks between the manager and investors. This helps embed the investor-first principle directly into the business model.

Comprehensive Offerings: Evolving the Product Ecosystem around Investment Value and Client Needs

Against a backdrop of accelerating index-based investing and rapid growth in the number of fund products, product offerings across the industry have become increasingly homogeneous. Developing products with lasting relevance, genuine alignment with client needs and the ability to provide suitable solutions under different market conditions has therefore become a central challenge in the high-quality development of the mutual fund industry.

GF Fund Management’s systematic approach to building product capabilities provides a useful example for the broader industry.

Supported by a highly diversified talent base and a professional, platform-based and multi-strategy investment research system, GF Fund Management integrates its assessment of industry development trends, market styles and genuine client needs to coordinate the development of both active and passive strategies across different asset classes. This continuously enhances the adaptability of its product range to different types of capital and market environments.

The Company places particular emphasis on major national strategic priorities and the development of new quality productive forces, positioning equity products in a forward-looking manner to provide suitable investment solutions for both medium- to long-term institutional capital and household allocation needs.

In active management, since the beginning of 2025, GF Fund Management has continuously refined its sector and thematic product offering based on assessments of industrial trends. It has focused on frontier areas including the full AI value chain, domestic and overseas computing infrastructure, energy storage, quantum computing, innovative pharmaceuticals and robotics, seeking to capture core opportunities arising from economic transformation and the development of new quality productive forces.

Beyond traditional discretionary long-only strategies, the Company has continued to explore diversified investment approaches. It was among the earlier market participants to develop teams and capabilities combining fundamental and quantitative investment, with the aim of improving beta capture efficiency and alpha stability.

The Company’s GF Smart Selection Equity Fund series is a practical example of this strategic innovation. Through a three-pronged “Fundamental + Quantitative + AI” approach and a collaborative “parallel model,” the strategy seeks to improve the stability, sustainability and systematic generation of excess returns. The series spans sectors including technology, manufacturing and cyclicals, with the objective of offering clients all-weather coverage across different investment styles and strategies.

In passive investment, GF Fund Management continues to develop and upgrade index products based on underlying investment value, building a modern suite of allocation tools designed for the future.

Its ETF offering currently spans seven major categories: broad-based indices, sector and thematic strategies, dividend strategies, cross-border markets, bonds, commodities and money market products. The range covers the A-share, Hong Kong and U.S. equity markets, with extensive exposure to popular themes and related value chains such as semiconductors, power, biopharmaceuticals, AI, commodities and cross-border investment. This makes GF Fund Management one of the managers with the most comprehensive product line-ups in the market.

Importantly, GF Fund Management has consistently adopted a solution-oriented approach to product development. While continuing to expand its underlying investment tools, the Company has also used its FOF product line as a key platform for integrating multi-asset and multi-strategy investment capabilities.

By translating asset allocation frameworks into product solutions with clearly defined risk-return profiles, the Company is better able to address clients’ diversified allocation needs. As of the end of June, GF Fund Management had established 27 FOF products, covering both pension and general-purpose FOFs. Together they form a graduated risk-return spectrum suitable for a variety of scenarios, including retirement investing and global asset allocation.

Building an asset management product franchise is much like playing a strategic game of chess. Success does not come from chasing short-term trends, but from forward-looking positioning, patience and sustained investment.

Only through early identification of long-term industry opportunities, continuous cultivation of seed products and persistent investment of resources into product development can an asset manager gradually build momentum and establish a comprehensive product system capable of meeting diversified client needs.

Outstanding Quality: A Full-Life-Cycle Management Framework Supporting Sustainable Investor Returns

If GF Fund Management’s product ecosystem were compared to a flourishing tree, “comprehensive offerings” would represent the branches and leaves extending outward, continuously discovering value and broadening the product universe, while “outstanding quality” would represent the deep roots growing inward, strengthening quality control and establishing robust safeguards.

While expanding its product portfolio and broadening its service capabilities, continuously enhancing investment management capabilities and product quality—and making investment performance more stable and controllable—is fundamental to earning investors’ long-term trust.

GF Fund Management consistently takes the sustainable investment experience of fund holders as its ultimate objective and continues to strengthen benchmark-oriented product quality management. Through institutionalized, digitalized and refined governance across multiple dimensions, the Company provides a solid operating foundation for its diversified product offerings and seeks to create products with stable, controllable and more predictable characteristics.

In terms of governance philosophy, the Company uses performance benchmarks as the primary anchor for product positioning, ensuring that the risk-return characteristics of each product are clearly defined.

In terms of institutional safeguards, it continues to refine investment management policies, establish regular review mechanisms, and strengthen investment behavior monitoring and corrective systems, creating clear and enforceable standards for investment management.

In terms of technology empowerment, the Company relies on its proprietary full-life-cycle product management system to establish a unified data foundation that is accumulative, comparable and traceable. This provides strong support for benchmark selection, operational monitoring and deviation analysis. At the same time, AI technologies are used to conduct more granular portfolio analysis, helping investment professionals scientifically evaluate investment outcomes and optimize investment behavior.

Building on this comprehensive quality-control foundation, the Company embeds its objective of “outstanding quality” throughout the entire product life cycle, creating a closed-loop framework covering “pre-launch controls, ongoing constraints and post-investment enhancement.” This framework continuously strengthens long-term product operating quality and seeks to create products with clear positioning, stable investment styles and strong client recognition.

At the product design stage, the Company has established a cross-departmental assessment mechanism. By combining market trends with client needs, it precisely defines each product’s investment style, target client group and performance benchmark, thereby addressing issues such as product homogeneity and unclear positioning from the outset. The Company also conducts regular reviews of its existing product range to enhance standardized governance.

During investment operations, institutional rules are used to impose disciplined constraints on investment behavior and preserve consistency in product investment styles. The Company has established professional teams responsible for optimizing and implementing investment management policies, supported by regular review mechanisms. Using each product’s benchmark as an anchor, the Company provides fund managers with detailed risk analysis and measurement tools to help improve the stability of investment performance.

In performance evaluation, the Company has established a more long-term and refined framework for performance assessment and incentive management. While maintaining a long-term evaluation horizon, it develops more scientific and granular assessment frameworks according to individual product positioning, ensuring that evaluation methods are better aligned with product objectives and investment mandates.

In parallel, its financial engineering team strengthens performance attribution and evaluation capabilities, providing professional support for scientifically assessing investment outcomes and continuously improving and iterating products.

From “comprehensive offerings” to “outstanding quality,” GF Fund Management is building a product ecosystem with both flourishing branches and deeply rooted foundations. Within this ecosystem, the systematic objective of enhancing investors’ sense of investment gains has been embedded as a guiding principle throughout the entire product life cycle.

As the mutual fund industry responds to the demands of high-quality development, GF Fund Management continues to strengthen its product capabilities, building a solid bridge between professional asset management expertise and tangible outcomes for investors. Through its long-term commitment to a “product leadership” strategy, the Company is reinforcing its core competitiveness in the emerging landscape of high-quality development.