Bottom-fishing in the micro-cap segment has already yielded a 13.82% return; small-cap ≠ micro-cap—here’s a curated list of micro-cap funds.

I’ve written several weekends in a row about funds hitting new highs—but this past Friday’s sharp decline prompted me to check the data. Among equity-oriented hybrid funds, flexible-asset-allocation funds, and enhanced index funds, only a handful of newly launched funds (established after June) hit new highs at Friday’s close—most are still in their initial portfolio-building phase. All funds established before June this year suffered losses across the board. Lan Mao’s ‘Harvest Day’ blog also covered some recently record-breaking funds. Those interested may refer to his article: ‘What? Some Funds Hit New Highs in September!’ Note, however, that he selected funds reaching new highs *during September*, not specifically on September 11. Lan Mao’s piece mentions the micro-cap strategy and cites three funds—Furong Fuyao, Nu’an Multi-Strategy, and Zhongyou Xinrui Quantitative—that closely track the Wind Micro-Cap Stock Index. Yet even though the underlying index remains short of its all-time high, these funds likewise haven’t reached new peaks. Here’s the chart he used: A post on Jisilu (a Chinese investment forum) claimed that holding small-cap stocks equates to value destruction—a view reflecting a misunderstanding of the Wind Micro-Cap Stock Index’s clever construction. According to Wind data, as of market close on September 11, the index has risen 522.15% over the past decade. It selects the 400 smallest non-ST stocks, and while it previously rebalanced daily—making it difficult for funds to track—it now rebalances less frequently, inherently enabling a ‘sell-high, buy-low’ effect. Several existing funds adopt this strategy; investors may use metrics such as maximum drawdown, price-to-book ratio, and median market capitalization of the index constituents as reference points for entry timing. Personally, I believe the two A-share strategies most suitable for long-term holding are dividend-focused and micro-cap strategies—where ‘micro-cap’ specifically refers to funds benchmarked against the Wind Micro-Cap Stock Index. Currently, no passive index fund tracks this index directly; instead, certain quantitative funds do so—but identifying them requires active research by individual investors. In late July this year, a fund manager publicly stated: ‘If a strategy has proven effective over the long term but performed extremely poorly in Q2, it likely represents a highly attractive opportunity for the foreseeable future’—and expressed strong confidence in micro-cap stocks. This reinforced my conviction, prompting me to bottom-fish and purchase some shares. Checking my holdings, as of market close this past weekend (September 11), the return stood at 13.82% (peaking near 20% earlier in the week before pulling back somewhat). See the full article: ‘This Strategy May Present an Excellent Opportunity Right Now.’ Data source: Personal investment records—provided for informational purposes only and does not constitute investment advice. The 2026 semi-annual reports have just been released, so I’m taking this opportunity to reorganize the landscape of small-cap-style funds—micro-cap strategy funds are embedded within this group. Important reminder: ‘Small-cap’ ≠ ‘micro-cap’—please distinguish carefully. Eligibility criteria: Fund type must be one of the following—equity-oriented hybrid, flexible-asset-allocation, or ordinary equity fund; small-cap style weight in the 2026 semi-annual report must exceed 80%; for multi-class share series, only Class A shares are retained. A total of 48 funds meet these conditions. These 48 funds are ranked in descending order by consolidated scale. For example, Nu’an Multi-Strategy Hybrid A, managed by Kong Xianzheng, has a scale of RMB 2.976 billion, with a combined small-cap style weight of 99.9%—specific dates and details are listed in the accompanying table. Data source: Choice, as of 2026-09-03. Past performance does not guarantee future results. Wan Minyuan’s Rongtong Healthcare Industry Flexible Allocation Hybrid A/B is an outlier: it focuses exclusively on small-cap healthcare stocks and qualifies as a healthcare-sector thematic fund—with a staggering 89.26% healthcare sector weighting in Q2 2026.

The revival of the small-cap and value factors in U.S. equities.

Since the onset of the pandemic last year, not only has the U.S. small-cap factor rebounded—but the value factor, dormant for over a decade, has also revived. That said, I noticed this trend quite late—only in November and December 2020. In U.S. markets, phenomena typically unfold in stages: discovery → analysis → confirmation → limited discussion → broad dissemination. By the time such insights reach general investors outside the U.S., considerable time has elapsed. I haven’t actively traded U.S. equities for over half a year. Had this occurred in the A-share market—and had I recognized it back in July or August last year—it would have been an excellent opportunity. Here, I’ll present only the outcomes. For professional analysis, please consult reports from Morgan Stanley or S&P—or visit U.S.-based financial platforms like Investing.com. Below are three representative Vanguard funds: VOO (S&P 500), VOOV (S&P 500 Value), and VB (U.S. Small-Cap), with price data starting from January 1, 2020: After the pandemic erupted last year, both value stocks and small-cap stocks fell more sharply than the broader S&P 500—similar to what happened in the A-share market at the time. Small-cap underperformance was expected—but the value segment’s weakness came as a major surprise. I’d assumed value stocks would be relatively resilient—long-term backtests seemingly supported this, showing lower volatility and shallower drawdowns. Yet in the face of sudden, systemic shocks, value stocks proved highly vulnerable. This realization drove me to reassess and rebalance my exposure to sudden-risk scenarios. Value stocks behave differently across two distinct risk dimensions: sudden (short-term) risk versus long-term (structural) risk.

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