China’s biggest fund managers increased their bets on technology and green-energy stocks at the expense of liquor distillers, taking advantage of depressed valuations following a trillion-dollar sector crash. They had contrasting fortunes amid policy twists. Zhang Kun, who manages more than 100 billion yuan (US$15.8 billion) at E Fund Management, added Tencent Holdings to elevate the WeChat operator as the top holding in his Blue Chip Selected Mixed Fund, according to his quarterly report to investors. Yang Ruiwen, who oversees about 50 billion yuan at Invesco Great Wall Fund Management, also bought chip maker Raytron Technology. Lu Bin at HSBC Jintrust Fund Management picked up more of No. 1 electric-car battery maker Contemporary Amperex Technology, their reports showed. The adjustments reflect the thinking and the struggle among domestic money managers as the Chinese economy lost further momentum. While the CSI 300 Index ended last quarter with gains amid rate cuts , the onshore market has been infected by concerns about policy tightening elsewhere. “It may not be a problem of whether to invest in technology stocks or not, but one of how to invest,” Shenzhen-based Yang said in his fund report. “China’s rise is impossible without the rise of technology stocks. We’ll be committed to tapping technology growth to bring sustainable above-average returns to investors.” China’s star manager hopes for redemption as all 4 funds suffered losses in 2021 Zhang’s flagship fund lost 0.1 per cent last quarter to end the year with an almost 10 per cent decline. Yang’s Selected Equity Fund gained 11 per cent during the October-to-December period, taking its annual winnings to 20 per cent. Yang’s fund has lost 5.1 per cent this month, in line with the broader market. E Fund and Invesco Great Wall declined to comment on the fund changes. “After the valuation digestion in 2021, some good quality companies are already attractive,” Zhang of E Fund said in one of his latest quarterly reports. There is a big chance their earnings will be reflected in their market value in the next three to five years, he added. Zhang bought 1.3 million shares in Tencent after the stock slumped 21 per cent in the third quarter, raising his stake to 18.3 million shares or 10 per cent of the US$11.1 billion Blue Chip Selected Mixed Fund. The social media giant was its 8th biggest holding in the third quarter. Guangzhou Shiyuan Electronic Technology, which makes intelligent interactive panels, took up 5.1 per cent of the fund managed by Yang at Invesco Great Wall. He bought 215,300 shares in the Shenzhen-based firm last quarter. Chip makers Raytron and Hangzhou Silan Microelectronics were his next favourites. Baijiu producers like Kweichow Moutai, Wuliangye Yibin and Luzhou Laojiao lost favour last quarter. Zhang and his peer Liu Yanchun at Invesco Great Wall trimmed their holdings in the December quarter. A rally in the stocks in late 2021 had pushed the price-earnings multiples of popular consumer-staple stocks to near record highs. Zhang sold 580,000 shares in Kweichow Moutai, relegating it to fourth largest in the fund, versus second in the third quarter. He also reduced his positions in smaller rival distillers Wuliangye and Luzhou Laojiao. Liu Yanchun, another star manager at Invesco Great Wall, made a similar move in paring down liquor stocks in his fund.